Is your budget working? You may be doing your best but watch out for signs that tell you that you need to take corrective steps. If you regularly hit the upper threshold for expenses well before the month is done, or you find the limits too constraining, or you are constantly juggling funds from one expense head to another, or you don’t seem to be making much of a headway on the debt and savings goals; then these are signs that your budget needs a relook. Here are some indicators that errors may have crept into your budget, and it needs fixing.
Reset if it is not working
If you regularly find yourself out of funds mid-month, it is an indicator that you may have missed something in the initial stage of setting up your budget. Instead of tracking expenses over a few months and then deciding the limits, you may have tried to guess or approximate the expenses, which may not accurately reflect your actual level of expenses. Another consequence of not tracking the expenses before making a budget is that you are likely to miss the smaller spends, which can all add up to become the deal breaker. If that has happened, you need to go back to the drawing board and start again—this time with a thorough analysis of all the expenses. Reset expense limits to what are more in line with your actual expenses. Another discipline that helps you stay within budget is to log your expenses regularly under each head. This way, you know when you need to take corrective action before things get out of hand. Update your budget every time there is a change in income or expenses, or at least every year, so that it reflects your current levels of income, expenses and the ability to save.
