You have a budget, but it isn’t working. Some categories have money left over at the end of the month, others are depleted before month end. It’s time to make some budget adjustments! It may take one to three months of budget experimentation before you find a system that works for your income and lifestyle. Never fear, following a budget will help you discover exactly where you are spending your money, and where you can save.
One of the great things about budgets is that they can be adjusted. Budgets are essentially a framework, or an estimation, of what you anticipate your financial needs to be in any given month. Generally speaking, some budgeted expenses are not likely to change, such as rent or mortgage payments, car payments, student loan payments, phone bills, or insurance payments. Other categories like utility bills, gas, groceries, and entertainment will likely vary month to month.
If you find that a particular category consistently ends the month with unspent funds, you can adjust the amount in that category downward, and allocate the extra funds elsewhere. Likewise, if there is a category that is consistently underfunded, you can adjust that amount using the extra funds.
If you are new to budgeting and need some assistance in setting up an initial budget outline, check with your bank or credit union. Many financial institutions offer budgeting tools, often online, that can provide you with an overview of your monthly expenditures, showing you where your money goes.
If your bank does not have such a tool, you can take your monthly statements and highlight expenditures in different categories using different colored highlighters, and track your spending on a simple spreadsheet or worksheet. (Tip: if your computer does not have Excel, free software packages such as OpenOffice also offer spreadsheets that can be used for budgeting.) Pinterest offers over 1,000 budget template ideas, so there’s sure to be something that will work for you.
Not a spreadsheet aficionado? A ledger works just as well. Whether you use a spreadsheet, worksheet, ledger, or pie chart, the goal is to keep a record of where you spend your income, so that you can get a handle on your money.