Like that old insurance commercial used to say, “Life comes at you fast”. The same is true when it comes to budgeting and your finances. Life changes quickly, and you need to make sure that your budget and your financial life can keep up. Here are some reasons to adjust your budget, and how you should do it.
When to Adjust Your Budget
You need to remember that your budget is a flexible document – just because your goal is to only spend $200 on gas doesn’t mean you will – what if your new job requires more driving? Things change, and you need to make sure that your budget changes with your life.
The first red flag to check and see if you need to adjust your budget is if you’re not making your goals, or are overspending in certain categories. You need to be honest with yourself, and ask if this is realistic, or has my life changed. It also could be not trying hard enough, so be honest with yourself.
Also, you should make appointments with yourself to check in on your budget every 6 months. Look at it, and reassess your goals, and see what you can do to achieve them. Life changes, so make sure your budget does as well.
How to Adjust Your Budget
Adjusting your budget can be easy, or it can be a pain. If you are sticking to a paper or excel budget and are updating it manually, it can be challenging to do so whenever your plans change. However, this manual effort can also make you try harder at just reaching your budgetary goals.
An easier way to adjust your budget is to use a program like Quicken or Mint and keep your budget in digital form that can be updated easily. Both of these programs allow you to put a budget in place, and then they categorize your spending automatically for you. You can then easily see where your wins and losses are, and adjust your budget accordingly.