Almost everyone dislikes budgeting, so it’s no surprise that people rarely (if ever) update their budgets after creating them. However, your priorities and financial needs change over time, and your budget should reflect that.
You could be making more money… or less. Have you moved?
Financial experts recommend updating your budget every six months. If you have been using the same budget for ages, use these tips to give it a facelift.
Use An App
Tracking your spending is one of the most effective ways to get a handle on an out-of-control budget. Manually listing transactions in a checkbook or spreadsheet takes time, though, and few people can keep up the habit.
That’s where a good financial app comes in. By syncing your accounts with a trustworthy financial app, you can immediately download and sort transactions to see exactly how much you are spending in various categories. Try popular options like Mint, PocketGuard, and You Need a Budget.
Look At The Next Six Months
While looking over your budget, you may simply think about your family’s current needs and how they have changed from the last incarnation of your budget. Remember that you should update your budget every six months, so your new budget should reflect any major changes coming in that timeframe. If you have a child leaving home for college, a debt that will be paid off, or another major financial change, make note of it in your budget.
Plan for Seasonal Expenses
Along that same line, don’t make the mistake of failing to plan for seasonal expenses. Whether you spend extra on car maintenance in winter, gas for summer trips, or school fees during the academic year, make sure to leave some wiggle room in your budget for these expenses.
Check Automatic Withdrawals and Charges
After syncing your accounts to a personal finance app, look for recurring charges and fees. Maybe you signed up for trial service and forgot to cancel it before you got charged. These “small” fees of $10 or less add up very quickly, creating a drain on your budget. Take a few minutes, get out your phone, and cancel any subscriptions you are no longer using.
Plan for a Fun (but Necessary) Purchase
Saving is its own reward, but it’s hard to remember that when everything you’re saving for is years or decades away. Give yourself something to look forward to buy creating room in your budget for a fun and necessary purchase. This might be new kitchen appliances, a new bedroom set, a car down payment, or a family computer. Just make sure it’s something that you will use. Set an end date for your savings goal so you can look forward to your big purchase.
If you get into the habit of updating your budget every six months, you’ll find it easier and easier to actually follow your budget. Start with these five tips and then keep going to make your budget fit your family.
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