Do you need to fix your budget? Even the best designed budget can either fall short of your needs or just be inappropriate for your current situation. One of the smartest money moves you can make is to review and update your budget regularly.

Review Your Budget

You’ll need to check the specifics of your budget to make sure it still works:

  • Track your day to day spending
  • Check your regular and irregular bills
  • Review income and tax amounts

How did you go?

Did you find, like me, that you need to fix your budget in a few areas? For example, areas where you consistently spend over your allotted amount? Consider this, is the overspending avoidable or do you need to update your budget to reflect these increased costs? The increasing cost of living can add pressure to your spending allocation. If it’s an area you can’t change much like the cost of commuting to your job, you’ll need to update your budget and potentially make cuts in other areas to compensate.

Are there new bills you need to include in your budget? A child starting school or even a new cell phone plan can seriously impact your budget. Updating these areas of spending are an important step toward fixing your budget.

Has your income increased or decreased recently? Changes to your income can creep in via reduced hours (or increased hours), a pay rise or changes to your personal tax rate. Make sure these changes are included in your budget.

fix your budget when it isn't working

How to Fix Your Budget

When I undertook a review of my own budget, I discovered a spending danger zone: ‘Food’. Over the preceding months the numbers showed I constantly struggled to keep to the budgeted amount for groceries. So, the question I had to ask myself was this: Do I struggle with my food budget because it is too tight or because I have no control when it comes to supermarkets? After some serious reflection, I was confident in saying it’s the latter – no control. My food budget is $100 per week for two adults and three feline fur babies. That ought to be ample.

Here’s what I did to fix the major problem in my budget

Here are some of the ways I used to get back on track. They might prove useful for you, too.

Re-evaluate needs and wants

A healthy breakfast is a need (oatmeal); packaged cereal (Cheerios) is a want.

Learn to tell yourself “no”

Just because you can (buy that chocolate bar) doesn’t mean you should. Consider imposing your own spending freeze.

Stop making excuses

The best way to stop the excuses is to actively take responsibility. That means making considered choices every single time you open your purse or wallet.

It’s easy to think that a bottle of soda or a bag of potato chips or block of chocolate here and there won’t make a huge difference to the total spend because they’re just a couple of dollars, right? Wrong! Soon, these wants become needs and choices become habits, before you know it, this junk food is in your trolley without you making a conscious decision to put it there. We’d been doing that quite a bit. Life gets busy and/or stressful and you fall back on old habits. You do this, because your brain doesn’t have to think, it can just slide into auto mode.

To break this habit and to focus on needs not wants, I’ve employed a few tricks:

Meal planning

For me, meal planning needs to be an active process rather than a passive list or ‘menu’. I also need to factor the preparation of each meal into my day otherwise, I know I’ll fall back on those old habits of convenience.

Shopping with a list (and only buying what’s on it)

No more ‘hunter gatherer’ style shopping for me! By being smart about what I buy and cooking the majority of our meals from scratch, I’ve been able to reduce our grocery spend by over 50%.

Using the cash envelope system for my food budget

This is not just to restrict spending but also for the visual reminder of the amount of money available. Plus, the cash envelope system makes your money tangible. Handing over cash feels different to handing over a plastic card.

And, most importantly, staying away from temptation – the supermarket!

Do you regularly review your budget? How often?