How often do you look at your budget? I’m not just talking about looking at it with your eyes only, but really looking at it.
As I found out this past weekend, budgets are definitely not a set it and forget it process. For me, I’d like to think I look at my budget fairly regularly. However, after redoing our budget the weekend, I was surprised to find that some of the numbers were way off. Whenever I get a bill that has changed amounts for the foreseeable future, I always try and enter the change in to my written budget right away. Sometimes it’s missed.
This got me thinking. How often should a person look at their budget?
When I got my surprise that my budget was off, I had just redone my budget about 3 or 4 months ago. That may not seem like a lot of time but it was more than enough time for some changes to occur that skewed the numbers. In addition, since it was so long ago, I can’t tell you if I was just not very thorough or made a mistake or what. It could be that I updated one or two of the amounts for individual bills and didn’t have time to update the overall total budgeted amounts. Who knows! But to me that’s a problem. So here’s what I am going to start doing.
I will be going over my budget once a month at the end of the month.
I recommend you do the same. Here are some great reasons why.
As I mentioned, the numbers were off on my budget just from 3 or 4 months of not really looking at it. Now my surprise was a nice surprise. I ended up having a little more money leftover each month than I thought I did. Other budgets may not be so friendly. What if you are actually down $50 or $100 a month and don’t know why? Looking at your budget more often will help.
Fewer surprises means less stress as well. Without the surprises you don’t have to worry about anything creeping up on you. Stress can be quite the motivational killer, and we want to keep you motivated with your finances!
Better Planning Opportunities
Looking at your budget monthly will also allow you to plan accordingly and adjust your plans as necessary. What if, like my situation, you have an extra $50 a month that you can start putting toward your debt? An extra $600 a year toward any type of debt principal will save you a lot of money in interest.
This also allows you to audit your budgeted categories such as gas, groceries, and eating out. I have recently noticed I spend significantly less on fuel than I have budgeted. This is potentially another $50 – $100 extra a month that I could put toward my quest to pay off $26,000 in debt October this year. That’s huge! If you are very confident in your debt payoff strategy already, there isn’t any reason why extra funds could be added to entertainment or eating out or giving. Take a look and see what you find!
If you haven’t looked at your budget in quite a few months, there is also a chance that you could be making a large financial decision without actually knowing much about your current financial situation. Perhaps you are looking at buying a new house and think you can easily afford a higher payment. However, it could be that there is a medical bill you are paying monthly on that severely depletes the extra income that you were thinking you had toward a new house payment.
Now we all know that mistakes are bound to happen regardless. However, the more you know, the more power you have. We’ve all heard the saying that “Knowledge is Power.” Before, I looked at my budget this past weekend, I didn’t really know what was going on with it. I thought I did, but the proof is in the fact that the numbers were off.
Now you may be wondering how it’s going to take less time to look at your budget if I’m suggesting looking at it more.
First, the more you do something the better you get at it. After a few months, it’s not going to take you as long to add up the numbers, catch mistakes, and make decisions on where to allocate funds. This translates to taking less time for each trip down “Budget Lane.”
Second, because you are spending so much time each trip, you will end up spending less overall time on your budget as well. Some months you may make small changes that will take you 5 minutes. Another month, you may make some major changes with it taking about a half hour.
Wondering how long it took me without looking at it for 3 to 4 months? About an hour and a half.
That’s right. I wasn’t even making very big changes, yet it took me the same amount of time as doing major changes for 3 months straight. I would have gotten some time back on that one.
Looking at your budget monthly can give you all of the above benefits. I encourage you to do that and see what happens. If nothing else, you will get some great peace of mind that all of your affairs are in order.
Let me know in the comments below how often you look at your budget and if you plan on making any changes!