Budgeting your money is one of the best methods to control your spending, simply because you know where each of your dollars ends up. But you can’t allow your budget to turn into a straight jacket: you should control your budget, rather than the other way around.
Unfortunately, many people — especially when they’re first developing a personal budget — let the budget take the leading role, often in two different ways.
- They don’t plan for changing circumstances, like a mid-month emergency.
- They don’t change their budget in response to upcoming events, like moving.
You don’t need to carve your budget in stone: you do not need a budget that will work month in and month out. Instead, your budget should be a living document — the kind you can easily amend or change. Furthermore, you should plan to change it on a fairly regular basis. It isn’t unreasonable to expect that you’ll need to at least review your budget and make small changes every month or so. However, it is practically mandatory to revise your budget when you have something out of the ordinary coming up: a vacation, moving expenses or even the holidays.
Consider the expenses of moving to a new home: you may be able to tweak your budget from residence to residence fairly easily if the rent or mortgage payments are similar. But the actual act of moving should also figure into your budget: extra gasoline for your truck, renting a U-Haul or hiring movers each can require an allotment of money in your budget that you wouldn’t normally worry about.
So how can you make your budget flexible?
Start out by keeping track of your budget in such a way that you feel comfortable making changes. I use an spreadsheet, although I know many people who still feel more comfortable with a paper budget. The one warning I would like to make about a paper budget, though, is that most people aren’t comfortable marking up a piece of paper over and over again. You may wind up rewriting your budget, or otherwise spend too much time trying to make a simple piece of paper look a little clearer.
You should also make the effort to check your budget once a month, preferably with your calendar in hand. I like sitting down at the beginning of the month, and reviewing both upcoming events and what I expect to need to spend, all in one go. I typically set aside one afternoon a month for all sorts of paperwork, including my budget. Most people don’t need to spend hours tweaking their budget — some months you may only need 10 minutes. But don’t forget to look a couple months out. If you’re trying to save a little extra for a trip home for the holidays, you should take that into account when reviewing your budget several months earlier.
Lastly, you need to remember who’s in charge. It’s your budget, and you should never be scared to rip it up and start over, if you need to.
