Admit it, you fell off the wagon. Whether it was an out-of-control financial situation or the urge to carelessly spend money to be like all of your friends, cash has flown out of the proverbial window for several weeks or months. Now that the binge is over and you’ve had a chance to size up the situation, you realize the carefully designed budget you put together so long ago is now in tatters and no longer taking your phone calls. What do you do at this point? Well, you can continue to spend until something greater brings you to a panic-driven halt, or you and the budget can get on speaking terms once again. If you decide to go this saner route, here are a few tips to make the reconciliation stick.
What went wrong?
Sometimes it takes one little thing to get the ball rolling. Perhaps funds were taken out of one budget category to spend on another, or you pulled from multiple selections. If you didn’t have enough money in your regular account you may have taken money from the emergency fund for something that was far from critical. Whatever the reason, you need to go back in your records – if you still have them – to determine the cause. Once you pinpoint where the dam burst you can start the patching process. If aren’t sure where it occurred, try to find a budget category that saw the largest impact during the financial binge.
Start from scratch
With the leak now plugged, the next thing to do is reignite the budget; however, not in its previous incarnation. Since spending spiraled out of control with the previous version of this document, the new model needs to incorporate additional categories that cover those other items. In addition, redistribution of funds may be necessary to clean up the previous damage. This is especially true if you raided the emergency fund when you overspent. If this was the case, repopulating this account needs to be a priority.
Make it stick
You and the budget are back on speaking terms; nevertheless, it’s simply a record of numbers and categories that, deep in your mind, you know can be manipulated at a moment’s notice. One way to make your budget stick and keep your hand away from the money jar is to set a goal and a timeline to reach it. This can be something physical, say a new smartphone, or a challenge to replenish the funds lost in your emergency account by a certain period of time. No matter which way you go, write the goal down and stick it prominently near your checkbook or the computer where your budget software resides. Looking at this piece of paper should give you pause before you do something you’ll regret.