How often should you review your budget? Well, isn’t that the million dollar question! I’ll be totally honest, I’m not the best at it. I’m very much of the ‘set it and forget it mindset’ BUT I’m trying to change that. I’m considering a bullet journal-style of affair. However, I’m trying to keep expenses low at the moment, since I’ve just dropped rather a lot of cash on Christmas pressies and an annual subscription to Tailwind (any tips would be very much appreciated BTW), so I think after I’ve written this I’m just going to go at it with a pen and a piece of paper, old school.
So, is there a definitive answer to how often you should review your budget? Predictably not, so I’ve broken down the time scales and the financial situations, so you can match ’em up. Does that make sense?
Basically, the more your income and expenses vary, the more often you’ll have to review your budget and your general situation. Also if you’re not so good at sticking to said budget, or you have a tendency to be little…spendy..it’s a good idea to keep a handle on all things money before everything starts to spiral out of control.
On a little side note, is anyone else terrified of this current trend to calculate one’s net worth? I blog about personal finance because I’m interested in it and I want to buy a house – not because I’m rich. Because I’m not. Like, at all. I dread to think what my net worth is. 50p maybe? Who knows? I certainly have no intention of finding out until I’ve paid off my mortgage/have become a bajillionaire, whichever comes first.
Ok, let’s crack on with the topic at hand…
You should review your budget…
Every week, if:
- You are terrible with money and cannot be trusted. You spend money like it burns a hole in your pocket and you have a really hard time saving anything at all. Don’t take any chances. Keep it at the forefront of your mind. Maybe consider keeping a money diary, where you record every penny that leaves your account.
- Your expenses vary wildly all the time – maybe you travel frequently or you have various subscriptions that turn up some months but not others – think web-hosting, Amazon Prime, that kind of thing. Even things like golf club memberships can cause your budget to fluctuate wildly.
- Your income varies a lot – Maybe you’re freelance, or you have your own business, or you rely on commission – keeping a handle on your budget will mean on less thing to worry about. Check out this post from The Simple Dollar for tips on budgeting when you have a variable income.
Every month, if:
- You’re pretty good with money. You save a bit and you know where your money’s going
- Your income stays pretty much the same, with a few variances depending on overtime/time off sick.
- Your expenses are fixed, with the odd extras – council tax, Christmas, that kind of thing.
Every year, if:
- You have this shit down. You know where every penny comes from and where every penny goes. You have your sinking funds down for Christmas, your car and any big expenses. If one tiny part of your budget changes, you review it then and there.
That’s what I aspire to be. That’s my goal, but in reality, I’m not very good at going through my bank statements and working it all out. I prefer to overestimate my expenses a little and not be too worried about things like my grocery shopping and impromptu Amazon purchases.
My excuse? I’m pretty good with money. I go through phases of spending a bit and then feel terribly guilty and become a hermit for a month or too, surviving only on pasta and beans on toast. However, this means that there’s probably £50 or so a month that just…disappears. After I’ve written this blog post I’m off to track down this ghost money.
I’m not saying I’m going to make sure every penny goes towards my savings, BUT I will give myself pocket money and have more of a handle on exactly where my money is going. In the past, every time I’ve gone out for a meal I’ve had this sense of mild guilt, because even though the money’s there, it might have been better spent elsewhere (i.e. towards the house deposit). I plan on making a separate budget for eating out – that way I can decide whether to have a couple of proper meals out a month or McDonald’s breakfast every week.
The purpose of this post isn’t to guilt you into going through your budget with a fine tooth comb (it’s to guilt ME into going through my budget with a fine tooth comb :D), but rather to inspire to keep your budget as a dynamic thing that will help you, rather than this big, heavy anchor that’s weighing you down. Make sense?
I’ve recently got into hand lettering, and I’m hoping to make my budget look pretty. It’s actually really spurring me on to get the boring, numbers part out of the way, so I get on with drawing pretty wreaths and banners. What a loser. Still, whatever gets your budget down on paper is good.
If any of you have been putting off making/reviewing a ‘proper budget’ (ahem, me) and prefer to bury your head in the sand about finances, consider signing up for my email course:
It’s a really low-key, easy way to get to grips with your money. There’s nothing to print out and no special tools required – just a pen and paper. It’s over ten days so there’s no rush, but it’ll get to the point where you can look at your finances without crying (if your finances do make you cry, there’re loads of easy, actionable tips that’ll get to a place where you feel a lot more positive about the whole thing). No judgement, just actionable steps. YOU GOT THIS.
Ugh, now off I go to sort out my finances. See you on the other side.