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When I do something like clean my room I’m will be like this is time everything will stay neat. But a month later everything is back to its usual state and I’m frustrated. Why can’t this place just stay clean? Well, it can if you put in the effort.
The problem most of the time when I’m cleaning and organizing things I think of it as a job I’m doing once. I never think how am I going to keep this place organized. It just organized now so it should stay that way.
Of course, it never quite works out the way I want it too. Most things need some maintenance or upkeep if you want to keep things going. And it the same thing with budgets.
Lots of people when they first start budgeting focus a lot on making the best budget ever. Now sometimes they do this to procrastinate a bit on actually starting budgeting. But it’s also done because they think they need the perfect budget.
The thing is your budget doesn’t have to be perfect to start, you just need to start. And over time by learning more about your spending and how you like to budget you can build a better budget.
If you need help getting started here is a post budgeting for beginners.
That’s what today I’m talking about maintaining your budget. It not the most glamorous part of budgeting but it is the most important part of budgeting.
So how do you actually go about maintaining your budget? I like to do everyday budget maintenance and monthly budget maintenance.
Keep your budget up to date
The most obvious daily budget maintenance is to enter each transaction in as soon as it happens. You want your budget to be up to date and reflect accurate information.
Ideally, you do this right after the transaction happens. So if you paid for dinner enter that into your budget before leaving the restaurant.
Sometimes you might not have the time to put things in your budget right away. In which case you should save the receipt so you can enter it into your budget later.
If you are entering things into your budget later try keeping a rough tally of how much money you spent and how much more you can spend. But try to enter everything into your budget right away.
It takes about 5-10 secs to put things into your budget. And you can do it anyway. Also if you wait to the end of the day and do everything at once it will feel like a lot more work.
So keep things simple and keep your budget up to date.
Deal with overspending
Sometimes when you are budgeting you overspend in one of your categories. This isn’t what we want but we can deal with it.
Overspending in a category isn’t a good enough excuse to give up budgeting. No matter how much your brain is trying to tell you otherwise.
Stay calm and fix the problem.
Fixing overspending isn’t hard all you have to do is move money around to cover it. If you spend $20 more on eating out then you had in your budget you just need to move $20 from another category into that one.
Once the issue has been fixed let’s think why it happened. And how you can prevent this from happening again.
Should you be checking your budget more? Was this an impulse purchase? Or was it an unexpected expense?
Think of ways you can prevent this from happening again and then move on. You’ll get better at budgeting the more you budget.
Can you see a trend with daily budget maintenance it about dealing with stuff as it happens. Which is also true for getting money into your budget.
Budget your money when you receive it
People seem to enjoy this one more than the other maintenance tasks listed above.
OK so you just got paid what should you do with the money. Well, you need to budget the money aka plan what you are going to do with it. The best time to that now.
Now it might not seem like a big deal but giving every dollar a job really does make a difference as I learnt from YNAB.
So when money goes into your budget give it a job. In an ideal world you would be living a month ahead and budgeting in order of priorities. Of course, this is the real world and life happens. Still, try your best to build your ideal budget.
By now you are probably an ace at doing budget things right away so let move on to monthly budget maintenance.
On a monthly basis, I like to go a little more in depth. And reflect on how I budgeted for the past month. As well as few more admin tasks.
Balance your budget
The first thing I do on a monthly basis is to make sure my budget balance. Basically, I make sure the numbers I have in my budget matches my bank account balances. My budget shows me all my accounts and how much I have in them which makes this super easy to do.
At this time I will also add interest to my budget. And do a quick scan of my bank accounts to make sure everything is looking normal.
Sometimes the numbers don’t match and then I just do an account history to see what went wrong. Often its something going through the wrong account. Or missing a transaction.
Look at next month budget
The next thing I like to do is look over the coming month budget. Do I have enough money to cover my essentials? Will there be money to spend on fun things. Or is this going to be a tighter month?
This is a good way to be aware of where you are with your budget. It helps to start a new month with a clean slate and get ready to go again.
Reflecting on the past month
A big part of my monthly budget maintenance is reflecting over the past month. What went well? Where did I struggle? Is there something I could improve?
I go through these questions every month and answer them. It also helps that I do my monthly income streams report publicly which holds me accountable.
So what went well with your budget the past month? What good things did you do? Did you hit any goals?
Then where did I struggle? Did you overspend at all? Or was it more of a mindset thing? As much as I hate admitting my struggles it really helps me catch small things before it becomes a bigger issue.
The final question is how can I improve? Is there something you can do to make your budget easier? Or help you overcome your budget struggles?
Something I always like to mention when talking about how to make your budget better is categories names. It’s a minor change that can have a big impact. So don’t underestimate those names.
The final thing to do is to actually implement the things you learn. And do the things you want to change.
Thinking and planning are great but action is better. So take action and maintain your budget. It’s worth it.
P.S. Here everything you need to know about budgets.
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