So, you’ve gone over budget, something you worked hard to avoid.
How do you respond to that?
For starters, take a deep breath and relax!
The world’s not going to end.
It’ll happen from time to time.
Budgeting is an important tool to use when you need to regulate your cash flow.
Your bank account is running low, you aren’t sure you can pay all your bills, or you can’t afford to treat yourself on the little things. Those are just some of the many reasons why a monthly budget may be needed.
Getting started, much like a blog post, is the hardest part.
Common Causes Of Going Over Budget
Sometimes you go over budget because of an emergency like an unexpected car repair. Other times, it’s because you treated yourself more than usual. The big thing is to not give up because you went over budget. This is just one of those little roadblocks you’ll hit from time to time.
Step back for a day or two and try not to spend anything. This gets you past the panic phase and into the logical thinking phase making it easier to see where you went over.
Now that you’re short on cash for the first time in your post budget era, what do you do? Pay a bill late, cut out an essential, anxiously await the next paycheck?
Maybe or maybe not.
The Power of an Emergency Fund
If you have an emergency fund (told you it’d appear again 😊) you can breathe a little easier. It’s for situations like this why you set one up in the first place and continued to contribute to it on a monthly basis.
Now’s the time to not be afraid of dipping into that fund. It will get you through this budgeting hiccup. Dave Ramsey’s rule of thumb is to keep a minimum of $1000 in your emergency fund. I agree with that but sometimes exceptions can be made. Sometimes. This is one of those times. Just don’t make a habit of it. Take stock of how much is in the fund, how much you are over budget and go from there. You’ll slowly make up that withdrawal by continuing the monthly contributions. That emergency fund you set up finally paid dividends in getting you through a tough month.
Reassess Your Money Allocations in Your Budget
You may not consider the emergency fund an option just because you went over budget.
Perhaps you are still building up that fund so it’s not a viable option. If either of these are the case, consider doing a deep dive into your budget. It never hurts to review your budget a couple of times a year. See what you can change for a month or two to get back on track. You might find one area where the budget needs paring down and another that needs an increase.
In the end remember, everyone goes over budget from time to time. It happens. The important thing is you can fix it, getting yourself back on track for the next month. You worked hard to set up that budget and stay on it. Don’t let the occasional off month derail you. You can get through it.