5 Signs Your Budget Needs a Makeover (And How to Do It)

You’ve been trying to use a budget, but it isn’t going so well. Don’t give up just yet: Before you throw in the towel, see if any of the following five issues (and remedies!) might pertain to your situation. If so, a budget makeover may be in the cards.

1. You keep busting your budget

The first step in creating a budget is setting targets for each spending category — how much you’ll save, give, and spend on everything from groceries to gifts. If you’re new to budgeting, it’s pretty common to get to the end of a month only to discover how drastically different your real-world spending is from your planned spending.

Don’t despair. Either you set unrealistic targets, or there may be ways to better manage your spending. Very likely, making your budget balance will require some of both.

What to do? Give yourself some slack. See the first few months of using a budget as a time of learning. If you’re tracking your spending for the first time, this is a great opportunity to find out how much you really do typically spend in each category. Don’t beat yourself up about it; learn from it.

In some categories, such as groceries, there’s a certain reality to how much it costs to feed a family your size. If you’re a family of five, $400 a month for groceries probably isn’t enough. In other categories, there may be opportunities to be more intentional and creative in finding ways to spend less.

Accept the fact that it usually takes several months to figure out realistic spending targets and build new money-saving spending habits. (See also: Stop Using These 5 Excuses Not to Budget)

2. You don’t realize you’re busting your budget until it’s too late

A common budgeting mistake is only reviewing how you’re doing at the end of each month. By then, it’s too late for course corrections.

An important key to successful budgeting is managing to the numbers. That requires looking at how your actual spending compares to your planned spending throughout the month. Before heading to the grocery store, it helps a…

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