It can be encouraging to plan out your monthly budget, and exciting when you’re able to stick to it. There’s nothing more satisfying than making a plan and seeing it through to completion with success. But life happens all the time, making it quite difficult to stick to your original monthly budget. Everyone has to deal with the constantly changing non-monthly expenses that show up and wreck your budget plans. Expenses like car or home repairs, health and medical issues, or birthdays, holidays and presents. These things don’t occur every month, and yet they occur every month. So how do you plan for these budget busters? Below are some easy tips to help you stay on budget each month.
Budget Using Annual Expenses
This is something that your financial advisor would be quick to explain to you as well. Once you start examining your spending from a macro level, you will be able to better structure your budget. Looking annually at expenses will provide big picture answers and enable you to set aside a much more accurate number for repair costs, or birthdays. When those things occur, even if they are technically unexpected, they won’t be financially unexpected and you’ll be covered and on track.
Save and Rollover
You may find that after a month of budgeting for non-expenses, you have some money left over. This temporary surplus is exactly how this is supposed to work because now that money gets rolled over into next month’s budget. If you established a $100 birthday budget but didn’t celebrate any birthdays, you have $200 for the next month’s birthday budget. These types of rollover funds are called sinking funds and most budget apps will help you keep track of them with ease. If you budget with the envelope method, whatever money is left in the envelope at the end of the month just stays there and you add to it moving forward.
Track Your Spending
If you remain vigilant, a budget buster really won’t be able to hurt you, but that alone, can be a difficult task. Where many people get into trouble is by not sticking to the original budget, and then suffering through an unplanned medical expense or housing repair. By tracking your spending, there’s a much higher chance that you stay within your means and your plan. Less impulse buying and more strategic saving allows a budget to actually work. It means your retirement fund will grow, and your emergency fund will remain intact. All of these positive, desired results will occur if you stay on top of how you spend your money. There is also no excuse to not track your spending nowadays because there are countless apps and services that will help you figure out and organize where every last penny is going.
A budget buster can ruin your month, your year or your relationship. They strain every situation and you can count on them to happen right when you least expect it. If you build these extra costs into your budget in the first place, the unexpected non-monthly expense becomes a small, expected hurdle, you easily get over, on your way to financial success.
