If you are looking to get on track with your budget, here are the Top Secrets to Fix a Busted Budget!
Staying on track with a budget is key to making your money work for you. These Top Secrets to Fix a Busted Budget can help you stay on track once and for all. Follow these steps, fix your budget, and if needed, go back and repeat the steps! Having a budget and managing your money is a monthly (or weekly) responsibility that you can’t brush to the side. You have to be intentional to spend, save, and give so that you are healthy financially. These steps are simple and essential to keeping your budget on track! Plus, here are even more Essential Budget Hacks!
Top Secrets to Fix a Broken Budget
1) Have a Budget
The first way to fix a broken budget is to have a budget in the first place. It sounds simple, but some people never know where their money goes because they don’t get it on paper and write it down. They have a budget in their head, but at the first sign of “I need that,” the budget is broken and it doesn’t seem to matter because “there is money in the account, it’s okay”. Next thing you know, the end of the month rolls around and all of your money is gone. No savings. No trips. Nothing to show for a month of hard work and hustling. The money is gone because you may have “thought” about a budget, but you didn’t purposefully place your money in specific categories in your budget.
2) Write Your Budget Down
Get it on paper. This is probably the most important thing for fixing a broken budget. When you take the time to write your budget down, a funny thing happens and it actually feels like you are getting a raise! You are able to tell your money exactly where to go and assign it to categories that include spending, saving, and giving. This is SO important because if you don’t do this it all gets thrown into the “spend” category and then it seems as if it just disappears every month.
3) Go on a Spending Freeze
If your budget is broken and you spent more money than you should have the past month (or multiple months before), the best thing that you can do is go on a spending freeze. A spending freeze is where you only pay the essential categories that month. These may include housing, food, fuel, medical, and only absolutely needed categories. Take the time this month to get your budget back on track and evaluate where you are and where you have spent the most. Don’t spend any money on eating out, clothing, entertainment, impulse purchases, or other miscellaneous spending. You will be surprised at how much money you have left over at the end of the month and how your money is in desperate need of a budget.
4) Evaluate Problem Areas
To evaluate the problem areas of your budget, consider writing down every. single. purchase. This is a huge task, but it’s totally worth the effort! Write down where you spend your money. Is it on eating out with friends, trips to the mall for things you don’t need, entertainment and luxury items you may not have the money for, or perhaps you spend a lot of money on travel or snacks throughout the week. Evaluate your money in all areas so that you can see where a majority of your money goes. This will also help you create the categories you need so that you don’t feel isolated within your budget.
5) Create Specific Categories
Creating specific categories keeps you from having those “oops” moments, or from wondering which category a purchase needs to come out of. My budget has many different categories and is very specific. This helps me limit my spending, but also gives me freedom to buy the things I need to buy.
Here are some of my favorite categories that are “extra” that not every budget seems to have..
Presents/Gifts for Others
For example, something that really helps me is having 3 categories for “food”.
1) Groceries: This is for grocery shopping. Going to the store and getting food to make at home.
2) Eating Out: For nights out with friends at a restaurant or if I’m absolutely too tired to cook. This category is separate from food because I want to limit myself to how much I eat out since it’s so expensive. This is a category where using cash is vital since it’s so easy to over spend.
3) Snacks: This is for candy, coffee, ice cream, or any afternoon snacks or treats. Having it’s own category really limits how much I spend. Instead of “knowing there is money there” I keep cash for this category so I have a set limit.
After you do these 5 things you should know where your money is going and be able to track it a better. These things can help you fix a broken budget and become intentional about where your money is going. If you have found that your budget is still broken after a hard look at these things, it could be that you have an income issue and need to find ways to grow your income on the side. Side hustles can be a huge way to increase your income and give you more flexibility in your budget!
If you are looking to jump start your budget, here are my favorite Budget Hacks for Saving Money Quickly!