As your finances improve or change, make budget changes to match your current situation
Once you create and start a budget, it is necessary to monitor your spending plan to be sure it is accurate and realistic to follow.
You may need to make minor changes in the first few months, but after that changes should be minimal unless your income or expenses drastically change.
Keep a hard copy of your budget easily accessible to use for your budget reviews.
This will not only aid in maintaining your focus and keeping your spending habits on track but also serves as motivation to keep striving to improve your financial future.
This chapter covers why it is essential to maintain an ongoing record of your budget and some pointers to assist you in what you should be looking for and when to make changes.
How to monitor your spending plan
Budgeting may not be fun or glamorous but if done correctly, it will change the way you manage money and will ultimately improve your financial situation.
It can be hard at first and most people don’t enjoy watching every dollar they spend, but after a while getting into the habit becomes easier.
You need to make a change to your spending plan when you have a change in your income or your expenses.
For example, if your work hours are cut and along with it your income, you’ll need to reduce expenses from your spending categories.
Since many expenses are not flexible such as your rent or mortgage, you will need to look at reducing how much you spend on items such as groceries or entertainment.
Another scenario that can significantly impact your budget as you monitor your spending is if the price of something increases. Gasoline is an example.
When your expenses increase and your income does not increase, you have to make adjustments to balance your budget with your current circumstances.
Tips to follow your spending plan
It’s critical to check your budget on a regular basis.
This is important for two reasons:
- When you monitor your spending you are more likely to stay on track with the established budget
- When something isn’t falling in place as it should, it is time to make a change
I recommend you place a copy of your budget in places where you see it every day. Of course, you won’t be using this copy to monitor your spending line by line, but as a motivational factor to keep it in front of you daily.
For example, if you tape it to your bathroom mirror you will see it first thing when you get up in the morning.
Positive affirmations are also a great way to stay on track as you monitor your spending plan to keep your mind excited and focused.
Make a little sketch or write a statement about your budget that explains why you are doing it.
Examples of Positive Affirmations
> I am capable of overcoming any money obstacles that stand in my way
> My income is always higher than my expenses
> I control my money, it does not control me
> I believe in my ability to follow my budget
> Financial security brings me peace
> I am worthy of a wealthy life
What about saving money?
Throughout the entire budgeting process, we have focused on saving money with everything we do.
However, you may be wondering why we haven’t talked about the importance of saving money from the perspective of putting it into an account that is growing, not just saving money on purchases.
Saving is an important budget category.
However, when a person is just beginning to monitor a spending plan and they haven’t been saving money, it can hinder the budgeting process more than help.
When too many changes are made at one time, we are less likely to be able to stay focused and follow the plan.
For most people, huge changes have already been made with cutting expenses to match their monthly income.
After several months when you are seeing progress and have developed confidence in yourself, it is time to revamp your spending plan and add the category of saving.
Saving money can mean we save it daily by purchasing generic grocery items, for example, or it can mean we are saving money by adding it into an account for an emergency fund, college for our kids, retirement, etc.
The next chapter provides tips for both!
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