Have you ever tried to watch what you eat — but wound up eating ice cream straight from a carton at midnight?
Much like sticking to (and ultimately abandoning) a diet, sometimes you’ll blow your budget — no matter how well you plan. It happens to the best of us.
But instead of beating yourself up, how about taking some time to think it through?
If you analyze your experience and understand what triggers your spending, you’re in a better position to catch yourself before you go off the rails.
Here are a few ideas to help you reset your budget and get back on track after a bad month (or three).
1. Evaluate what went wrong
A wise person once said that those who do not learn from history are doomed to repeat it. That definitely applies to making budgeting mistakes.
It’s hard to know how to fix a problem if you don’t know what caused it. Don’t feel ashamed of overspending. Don’t play the blame game. You just need to understand where your money went. Then you can figure out how to avoid wrecking your budget in the future.
Budgets are busted for a variety of reasons, from emergency car repairs or unexpected medical bills to spending too much money at restaurants. Whatever the cause, find out what went wrong. Then figure out how to prevent it from happening again.
2. Build your emergency fund
How long could you survive without getting a regular paycheck? That’s a scary thought for most people.
Many experts say that having between three and six months’ worth of living expenses in a savings account is a critical part of your financial plan. Unexpected expenses won’t cause you nearly as much stress if you have cash on hand to pay for them. I know putting away three to six weeks’ salary sounds impossible. And yes, it may take time to get there, but it’s worth the effort.
3. Update your game plan
If you blow your budget regularly, it may be time for a reality check.
If you budget $500 for groceries, but wind up spending $800 every month, it may be time to adjust your budget to make room for the “real” number.
An accurate budget should be easier to maintain. It will also cut down on the guilt when you underestimate (or overestimate) your goals.