Check out these four tricks retailers use to get you to spend more (without you knowing it).
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A sloppy budget is a lot like a car that won’t start. It may look nice, but if it doesn’t take you where you need to go, what’s the point?
It’s time to get under the hood and get your budget working for you again. Here are seven signs you need to restart your financial engine.
1. Withdrawing cash before you budget
It’s the first of the month. You have no cash and need groceries—like yesterday. Why not swing by the ATM, grab some cash, and do the budget later? Because you’ll forget! And without a plan, your cash will pull a disappearing act. So before the month begins, write out your budget on paper, on purpose. If you wait, it won’t get done.
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Related: Looking for a digital way to manage your budget? Check out our free budget software EveryDollar.
2. Not giving off the top (or at all)
If you want to win at money, you must give. It’s as simple as that. When you give off the top of a well-managed budget, you may be surprised to find that living on less can actually feel like you have more. That’s because managed money works harder. Charitable giving should always be the first line on your budget.
3. Constantly worrying about "unexpected" big purchases
There’s no reason to live in limbo. If your clothes dryer dies, you need to know exactly how much your budget allows for a new one. Shopping without a figure in mind is a recipe for anxiety and overspending. The whole point of a budget is to take away the worry of the unknown. So when you budget, give every dollar a name, and if that name isn’t "new dryer" then go find yourself a clothes line.
4. Robbing yourself to pay yourself
Are you constantly borrowing from one envelope to pay another? Or putting everything on your debit card toward the end of the month and saying you’ll figure it out later? Either your budget has a problem, or you do. If it’s you, then you’re buying impulsively and need to practice some delayed gratification. If it’s your budget, then you aren’t being realistic enough. Make your budget practical—not just pretty.
5. Forgetting about annual expenses
Dentist visits, pet shots, car insurance, birthdays—these annual expenses can leave you dipping into your emergency fund if you’re not careful. Instead of stealing from your savings, create a budgeting "cheat sheet" on which you list annual expenses and the months they’re due. Leave your emergency fund intact by budgeting with the big picture in mind.
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6. Spending too much in one category
Are you spending half your budget on takeout? Straighten out your spending by giving each category a specific percentage. We recommend 5-15% for food, 25-35% on housing, 10-15% in savings, and 10-15% on charitable giving. And make sure your entire budget—including clothing, transportation, insurance and entertainment—equals 100%. No matter what!
7. Using the same budget every month
Because there’s no such thing as "the perfect month," a one-size-fits-all budget won’t cut it. You have to make a new budget every single month. It’s fine to look at last month’s budget for direction, but expenses change with the seasons. Schedule a budget committee meeting before the month begins and stop expecting an old plan to work for new expenses. Having good intentions with your money is a step in the right direction, but it won’t get you very far. Reevaluate your budget and fix the areas that aren’t working.
It’s never too late for a fresh start.
If you feel stalled on where to start with a budget or how to manage your money, check out Financial Peace University (FPU) Online Home Study. FPU Online gives you the opportunity to learn how to budget, pay down debt, save for retirement, and much more in the convenience and comfort of your own home.