You’ve examined your income and expenses, carefully designed a realistic budget, and resolved to stick to it. The hard part comes next. Maintaining a personal budget requires discipline, flexibility and daily attention. By keeping daily tabs on your spending and planning for the unexpected, maintaining a personal budget need not be impossible.
Maintaining Your Budget
Carry your budget with you. Unless you’ve got a great memory, you’ll need to carry a hard copy or accessible electronic copy. When that dress in the window calls your name, you can pull out your budget and juggle some things around. For example, a dress that costs $200 might be worth sacrificing next month’s cut and color at the salon. Or maybe not. Suddenly, you can't hear that dress calling anymore.
Carry a calculator with you. Daily errands, such as grocery shopping, can be insidious budget saboteurs. Keep a cumulative total of your grocery cart’s items as you move through the store. If you’ve exceeded your weekly budget before making it through half the store, you can take stock. It's okay to take advantage of sale prices today to reduce next week's grocery bill, but remember to note this in your check register. Also, choosing a generic version can make a big difference.
Read through your budget on a weekly basis. Once a week, sit down and review whether your budget is realistic. If you continually exceed your limits in one category, it may mean you’ll have to readjust the amount allowed. Unless your income will adjust proportionately, you’ll have to sacrifice other items to do so. For example, if your dry cleaning bill is $20 per week instead of the budgeted $10, and reducing this expense is not feasible, you may have to reduce your allowance for new clothes.
List special events in your budget. Check your calendar and plan ahead. If you know you have a wedding in five months, reduce your monthly spending on your clothing allowance now to buy that perfect dress later. You can plan for vacations, landscaping projects and home improvement projects similarly.
Save at least $1,000 for unexpected expenses. You may not have budgeted for a new windshield, but that gravel road thought you needed one anyway. Similarly, we don’t plan or budget for travel to loved ones’ funerals or minor medical emergencies, but they do happen.
Sara Huter is a professor of economics. Her background also includes risk management in the banking and energy industries with expertise in credit scores. Huter received an M.B.A. in finance from Texas A&M University and a B.S. in information systems from Kansas State University. She has been writing for over five years with work at Popsyndicate.com, WickedWordSmith.com and Simplejoy.com.