Going over budget is common, a little too common especially when you’re first starting out. I know how it feels to wonder what to do when you go over budget. But trust me, it’s part of the process and it even still happens to me if I’m being completely honest. From my experience, the last thing you want to do dum yourself out about going over budget. Instead, take it as a learning lesson to really look at yourself and your spending habits. I’ve personally have learned a lot from going over budget. It’s helped me find some creative ways to get back on track with my budget, no matter how crazy it got.
Is it Inflation or is it your budget?
Recently inflation has been a big issue. The news reports that inflation is a bit high, but when I compare it to my previous budgets from the past it’s way high. Making it very difficult to project out how much gas, food, household items, and utilities are going to cost this month. Give yourself some empathy if your budget is out of wack. The best that we can do is by adding a First Aid Kit to your budget to give yourself an extra stash of cash for budget overages. I specifically use my First Aid Kit for small expenses that tend to fluctuate like gas prices, utilities, groceries, or even small medical needs.
If you’re struggling with budgeting due to inflation, checkout my blog, 3 Ways to Deal with Inflation Right Now.
Separate your budget
If you’re new to budgeting or just are feeling stuck and don’t know what to do when you go over budget. For a lot of people, it’s hard to initially see where the leak is coming from. This is why my go-to financial tip is one of the High-5 Banking Method, which is to separate your bills from your lifestyle expenses. Separating these budgets is going to make it clear if you are overspending on groceries or eating out, household toiletries, or home decor. Trust me, we all think that we know how much we’re spending on our lifestyle. But it can rack up quickly if you don’t get it under control. This tip will help you get a hold of your spending and better manage your budget. It’s a game-changer for a reason.
Be Real About your Spending
A triggering tip is to be real with yourself about your spending. It doesn’t matter whether you are over budget or not. Not being honest with yourself about how much you actually spend isn’t helping you. If you know that you like to go out to eat then don’t give yourself an unrealistic budget of $100 when you spend $400. You might not like that higher number and may want to reduce it. That’s fine. I recommend gradually reducing this budget so that you can get used to hitting a realistic budget. Trust me it feels great!
Review Your Budget More Frequently
The last step is to increase the frequency that you check your budget. If you only review your budget once or twice a month you want to increase it to a weekly basis. Give yourself a range of how much you want to spend, so that you be realistic and also practical with yourself. I personally go grocery shopping every weekend, so I’ve gotten into a habit of reviewing my budget beforehand. This gives me a quick reminder if I need to be a bit more frugal on this trip or if I can afford to splurge. If I didn’t do this, I would just be guessing and would probably get tempted into going over my budget.
Once you’ve gotten into a good routine with your budget you can pull back the frequency that you check it. I know it sounds crazy, but eventually, you will get used to your routine of how much you spend on groceries, utilities, or at the gas station. This consistency allows you to better plan for the expected and makes room for the spontaneity that we all crave. Instead of douting your budgeting skills, work on them and remember that it’s a process.