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Ask Dave

Why the Need For a Fresh Monthly Budget?

Kara asks Dave why he recommends doing a new budget every month. Dave explains.

QUESTION: Kara in Georgia asks Dave why he recommends doing a new budget every month. Dave explains.

ANSWER: A fresh budget every month is a tweaked standard budget. Every month is different. Your income is different. Your bills are different. Some bills are the same. Your house payment, if you have one, is the same. Probably your food allocation is about the same. For instance, I have gas heat in my home. I cool with electricity. In the summertime, I have a higher electric bill and almost no gas bill. In the wintertime, I have a lower electric bill and a higher gas bill. I’ve got to budget differently for those utilities in those months and try to figure that out. Around Thanksgiving and Christmas, we spend more on food because we’re buying turkeys and entertaining and those kinds of things than we do in a typical month. In the summertime, we might spend more on food if we’re down at the lake house. We have a lake house envelope for spending at the lake house in the summer. We don’t have that in the winter. We don’t need it. That kind of thing is why you customize each month. But other things that are very standard remain exactly the same every month.

You are, in a sense, tweaking a standard budget. The problem is people try to do this template and never change it. Your budget needs to reflect your reality. Your written game plan needs to reflect the reality of where you are for this coming month.