If you budget, at some point, you WILL bust the budget.
Your friends will ask you to dinner after the entertainment money is gone.
A bill will be more than expected.
There will be a sale that you just can’t say no to.
The sole of your work shoes will fall off.
Your only pair of work pants will get a hole.
Your kid will forget to tell you about a field trip (field trips will happen again someday, right?).
Your water heater will break.
Your air conditioning will go out on the hottest day of the year.
It happens. All of a sudden, you realize that the budget you set up so carefully (probably using these 3 easy steps), is busted, and you’re scrambling to figure out how to make it to the end of the month. It’s easy to watch things get off track and throw up your hands feeling like you might as well give up for the month. But there are a few things you can do to ensure that you don’t fall completely off the rails.
1. Don’t panic
This happens. Sometimes the busted budget is a result of something that can’t be helped (emergency home maintenance, car issues, etc). Sometimes something fun comes up, and you just decide to go for it. Either way, it’s nothing to be ashamed of. You’re not perfect. But don’t panic or feel like you’ve failed. Re-evaluating the budget and moving some things around can get you back on track quickly. And either way, a new month is always right round the corner.
2. Reassess other categories
Are there other categories where you think you’ll come in under budget? You can shift money around, taking it from categories where you won’t need it and moving it to a new category or the category where you know you’ll go over.
3. Budget it into the next month
We’re guilty of doing this a little too much sometimes. But because of the fact that we use income from the previous month to budget for the current month, as expenses come out, the current month’s paychecks are coming in. This always gives us a little bit of a cushion in the event that an unexpected expense comes up. Then we make sure to budget it into the next month’s budget to make sure we’re tracking all of our money.
4. Use your emergency fund
If you’re following Dave Ramsey’s Baby Steps, you’ll either have a starter emergency fund of $1,000 or an emergency fund of 3-6 months of expenses. Even if you’re not following the Baby Steps, you should still have an emergency fund set up. Sometimes the budget is busted because of something that is an actual emergency (dinner out with friends is not). If it’s an actual emergency that you can’t work it into either this month’s or the next month’s budget, it might need to come out of the emergency fund. Then, when things get back on track, you can work towards building the emergency fund back up. The same premise can be used if you have money in sinking funds.
No matter how you choose to get the budget back on track, it’s important to stick with it. We’ve been budgeting for 6 years, and there are still months that we have to adjust mid-month. A budget is intended to be a plan that helps to ensure you’re not over spending and living within your means, but it isn’t meant to be intimidating or something that is overly restrictive. Budget, evaluate, adjust, and you’ll be fine!
How do you get back on track if your budget is busted???