Should I Update the Budget?

Should I Update the Budget?

You've created a budget. Every month you've been looking at that history of spending and seeing how you did. Now what? Should you update the budget?
Photo Credit: FreeImages.com/Adriana Cal

You’ve created a budget.  Every month you’ve been looking at your history of spending and seeing how you did.  Now what?

Do I need to update it?

How do I know if it’s where it needs to be?

Budgets are tricky things.  They are hard to figure out at times, especially as life happens and income may change.  I’ve got a few signs to look for that may help you answer this question and determine if you need to update or change your budget.

Signs you need to update the budget

1. You are ALWAYS going over in a specific category.

If you’ve been trying to stick to your budget for 2-3 months, but you STILL find yourself ALWAYS going over in one category, you may need to adjust that category.

For example:  We were ALWAYS going over in food.  I had been trying to meal plan and be frugal with our groceries, but I was still going over.  I became frustrated and would just excessively spend in the area because I was “already over”.

This was NOT good!

We went ahead and increase our budget $50 then tried again the next few months.  This allowed us a buffer and I found I was spending less because I could keep within the boundaries.  It will also allow you to see a WIN when you keep to it!

It is important to see yourself “winning” in your finances… this is exciting and keeps you motivated

2. Your income increased/decreased.

Since income changes can be common, your budget needs to adjust accordingly.  Pay raises, second income, or a loss of a job are all reasons you need to update the budget.

Pay raises can allow you to stick with the same budget, and gives you the option to increase money into your savings or emergency fund.

A decrease in income will need to show in your budget as well.  Are you able to lower your gas or food since your may not be traveling as much?  Is there a way you can make phone calls to utility, TV/internet providers, or phone company to decrease some bills?

Even if your income is less for a short period of time, the budget needs to reflect that.

When I had my 3rd child, I quit working my Saturday job for 3 months.  That was  bringing in an extra $100-300 and month.  It was very difficult to try to find that extra money in the budget.  Since the income was less it was IMPORTANT to update the budget so we would not be $300-600 in the negatives from our usual spending.


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3. You are ready to forget about the whole “budget thing”.

Since you’ve made your budget, you’ve been trying REALLY hard to stick to it.  But, for some reason, it’s just not working and you are beyond frustrated.  Ready to throw it out the window and forget about it!

I hear you!  I was in that same place!

The key thing you need to know is…

Do NOT quit!  It WILL get better!

It might take 6 months or a whole year before you can break those bad habits and start improving your good money habits.  But if you stop now, you will have to start all over again.  Just keep going.  You can do it!  Ask me for encouragement if you need it and I’ll help you.

4. You are always under in some categories.

Most of us tend to be over in some areas… but if you are under that’s OK too.  Take that extra money and re-shift it.  Put it into a category that you are over in, or put the extra into savings.  It’s important to give ALL of your money a place, if not you won’t know where it goes and it will be used on items that aren’t “needed”.

5. You have a major “expensive” event coming up in the future.

Some of these major events could be a surgery, new baby, new car or house, or even starting school.  If you know of something that is coming up and will take extra money, start including that and update your budget.  This will help you prepare for when you need that extra money.  You can read more about how to budget for one-time expenses here.

Should I update the budget?

YES!  Yes, you should.  At the end of the month it is important to review how you did sticking to your budget and make any changes for the next month.

How often do you update your budget? Comment below.

Further Reading:

Should you Upgrade your House?

8 Reasons you are Always Over Budget

How do I Add an Extra Shopping Week into my Grocery Budget?

As always, if you love what you read or have found it helpful, please share or comment below.  

Thanks for reading! 

This post may contain affiliate links.  Read my affiliate link disclosure here

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