Your budget is working when your income and expense columns balance out. And that won’t take long to determine. In fact, just one month on a budget will reveal if and where you need to make adjustments.
Initially, check your progress on a monthly basis, beginning one month after you’ve been on your budget. Was your new spending plan realistic? Did you give it a fair chance? Where might you have overspent, or underspent? Did you forget to include a source of income or certain expenditure? Once you’ve completed your evaluation, look for ways to make improvements for the month ahead.
If you’re budgeting as a couple, you may want to check in with one another a few times a week to see how each of you is doing. Touching base like this can be more than supportive. It often reminds couples that achieving financial goals is a joint effort. You need each other to succeed!
The second month is for working out possible kinks. If you find that you’re still spending more than you earn, first review variable expenses for additional cuts. Since these expenses are typically non-essential (wants rather than needs), it’s often fairly easy to shave a few dollars here and there to bring your budget into balance.
By the end of this second month, you should feel more comfortable with your budget as your new spending patterns become routine.
By the end of the third month, your spending plan should be running smoothly. If it’s not, and if you simply don’t know how to make things right, you may want to consider consulting a money manager. Sometimes, clear-eyed professional guidance and encouragement is all that’s needed.
It’s smart to evaluate your annual budget. Insight into larger spending patterns can help you reprioritize how you spend and save in ways better suited to achieving your longer-term financial goals.
Remember, expense management isn’t a one-and-done. Your needs, goals, and income will change over time, so plan to re-evaluate your budget as your professional and personal successes grow.