How Often Should You Create a Budget? (And Other Money Secrets)
Creating a budget is an important way to manage your money more easily. It can help you understand your expenses, plan for future events, save for retirement, and see where you can reduce unnecessary spending. Budgeting is also something that’s ongoing and interactive. In other words, you can’t just create a budget and leave it the same forever.
Your circumstances will change over time, and your budget needs to change, as well. Additionally, you want to make adjustments to anything in the budget that’s not working for you, and if you don’t reevaluate your budget every now and then, you aren’t going to be able to make changes that will improve your current financial picture or what you intend to do in the future.
To Make A Budget, Include Every Area Of Spending
A lot of people look at the bare bones of their finances when they create a budget. In other words, they deny themselves anything fun or unneeded and only figure out how much they need to pay bills. Frequently, they put everything extra into paying off debt, which is a noble cause but not the only thing that matters in life.
When making a budget, remember to include some money for fun! You don’t want to sit at home all the time, never doing anything enjoyable. That’s an easy way to get burnt out quickly, and the frustration of keeping such tight control on your spending could lead you to lose patience with the process and overspend. When you make room in the budget for things you enjoy, you’re less likely to spend too much on things you don’t need since you won’t feel deprived.
Use Software Or An App To Help See Where You Are
By using budgeting apps, you can get a much better picture of where you’re at with your finances. These apps do a lot of calculations for you and can also help you see how long it will take to pay off certain debts, what percentage of your income is going toward certain categories, and much more. There are free apps and ones that have a small fee, so you can choose the option you like the best.
A lot of people like to just make a spreadsheet or write everything down and track it manually. While there’s technically nothing wrong with that, it can be valuable to have the detail and calculation abilities that come with budget apps. You might want to try out more than one until you find the right fit, but doing your research will help you locate a good choice faster.
Create Your Budget Once, But Adjust It Weekly, Monthly, or On Paydays
It’s common to ask yourself why budgeting is important, but remember that there may be different answers to that question depending on who you ask. You could be budgeting to pay off debt or because you want to save for an important event. There’s no right or wrong reason, and a budget can be very individual and personal. The goal is to find one that works for your needs.
Some people budget because they don’t have a lot of money and need to know where all of it is going. Other people budget because they have big plans or an upcoming vacation. So how often should you create a budget? No matter why you need a budget, you should only have to create it once. Then it’s just a matter of making adjustments to it over time.
Especially in the early days of your budget, you’ll want to look at it weekly or monthly. You can also adjust it every time you get paid, if necessary. The important thing is that you list everything accurately and adjust it every time something changes, so you always know where you stand financially.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author.
He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.
He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom.