Money money money. It’s the time of year when I start thinking about gathering up all of my tax documents and emerging from post-holiday bill season, so I like to take another look at my budget and make sure I’m on track. I’m sure many of you have your own reminders of when you need to do that, or maybe this post will act that way for you. Whether we live paycheck-to-paycheck or have a comfortable cushion, it’s important to take stock once a while and make sure we’re not only where we want to be, but headed in the direction that’s right for us financially. Even for those of us who have already put together excellent budgets and are doing a good job of sticking with them – first of all, please share your tips and tricks! But second, when was the last time you made sure that those budgets reflect where you are in life today? Let’s talk about a few things that might drive re-prioritizing your spending and saving plans:
Your life circumstances have changed or you anticipate a possible change. Maybe you’ve started thinking about having a child, or getting married, or perhaps getting divorced. Maybe you’re starting to toy with the idea of a career switch, or a move across the country to be closer to (or further from!) family or friends. In today’s reality, one of the first things you’re going to need to do to make that happen as painlessly as possible is to get your finances in order. The things you’ll have to spend your money on will change, and you might need additional savings to pull it off. Even if it’s just a glimmer of an idea that you’re coming up on a big life event, adjusting your budget in advance can be a welcome cushion because no matter how welcome the new situation is, it’s still going to be a source of stress.
Your income levels have changed. Whether you’ve had to take a pay cut because of the pandemic or otherwise, picked up a side job, or have learned that you’re getting a bonus, basing your spending on the wrong amount of income can become problematic. Making the budget work on a month to month basis can be fine, right up until it isn’t. It’s easy to not really know if the balance in your bank account is moving in the direction you need or want if you’re not tracking it specifically instead of relying on vague memories of what you had in there last time you looked and a rough idea of what bills are coming up. Instead, it might be better to examine what and how you’re spending, taking into account your actual current income, to make sure that you’re not over-spending or to see if maybe you have a little extra room you didn’t know you had to start padding your emergency fund or saving for a special splurge.
Your priorities have changed. It happens to everyone: you get a new hobby, discover a new favorite drink, drift out of your regular Quizzo night (is Quizzo a thing in other parts of the country?), decide you don’t really need anymore of that one collectible you were really into. Because it’s not always intentional, you might not notice that you’re increasingly spending money in one area or letting your budget stay flush in another. You might be spending the same total amount as you always do, but it’s coming out of different buckets. There’s nothing wrong with that for overall living within your means, but it can make being ready for the future harder. It’s also easy to creep up spend slowly, but even if you find that you’re actually under your total budget, you’re giving up the opportunity to be sure you don’t let your new priority take over your financial life.
You aren’t following your budget anyway. Let’s admit it – we’ve all been there, either ignoring our budget or having to admit we don’t actually have one. It’s totally normal and natural and frankly, it doesn’t matter how or why it happens. What’s important is noticing that it has, and doing something about it. You can start simple and just set a realistic base number you want your bank account to be at the end of every month after your bills are paid or your credit card bill to max at before its due date. You might even set a calendar reminder with that number or future numbers to check in with yourself regularly. Or you can get as complicated as shoving all of your accounts into financial software, planning where every cent of your income goes, and tracking it on a daily basis. Or somewhere in between, something that means that you aren’t just praying that your income will be enough for all of your regular needs and that your normal expenses aren’t growing beyond what you can pay without going into unplanned debt.
You haven’t taken a look at your financial picture in a while. Sometimes life just gets busy and since we are fortunate enough not to be struggling heavily with our bills, or because we’re having so much trouble making ends meet, we just stop paying attention to the specifics of what’s going in and out of our bank accounts. We just…make it work and that’s enough. Certainly it’s enough to be proud of, because we’re getting through today, to tomorrow, and even the day after. But we have the opportunity to make our futures just a little bit easier, a little bit more predictable. That’s why spending a rare free evening or weekend day taking a fresh look at all of our accounts, at all of our income, at all of our expenses, and doing our best to reshuffle all of the pieces to waste the least amount of money, get out of the most possible debt, and save the most efficiently for a future treat or emergency, is a worthwhile chunk of self-care time. It won’t feel as good as a bubble bath, but nobody says you can’t soak your feet or put on a face mask while you’re doing it.
So…which one are you at? And when are you going to do something about it?