You did your budget calendar, made your budget for your paycheck, and made it through the pay period (possibly kicking and screaming but hopefully not). Now what?
Before you do your next paycheck budget (yes, you should do one for every paycheck), it’s a good idea to close out the active paycheck budget so you can review how the pay period went and see where you may need to make adjustments.
If this is your first time doing a budget review, there are two main questions you may want to consider:
- How did you do in your overall spending compared to what you budgeted?
- How did you do in particular categories in your budget?
Depending on your answers to these, it may be time to make some adjustments to the budget. Are you spending more than you should on eating out? (I give Chick-fil-A all my money because it is convenient, consistent, and I hate cooking, but that’s a story for another day.) Is your cable/internet bill too high? When is the last time you looked at your subscriptions? The world is opening back up – do you need to allocate funds to actually leaving the house? These are all things to take into consideration.
Another benefit of reviewing the budget is to see what is working for you and what isn’t. Perhaps the spending categories, or envelopes that you are tracking don’t fit your lifestyle as much as they need to. In this pay period, I decided I don’t need to track iCloud as its own sinking fund; while yes it is an expense I don’t need to forget, it’s also only $1, which I can cover with either my cushion, or my Apple gift card funds.
You’ll also notice I had a lot of money left over at the end of this pay period, but I also did not pay a lot of the bills as allocated. The money is still there, I just didn’t actually spend it this pay period. I also received money from a couple of sources that was so completely unexpected I didn’t quite know what to do with it. Actually, that’s not true. I wanted time to sit with it a bit and decide what would be best for me to do with it, so I didn’t do anything. It will be a part of the next budget.
How was your budget review?
Sweet Jesus that is detailed …makes my brain hurt…how beneficial do you feel this is?
It is admittedly very detailed. To anyone just starting this much detail is not necessary. For my personality however, it’s great! I’ve found categories I need to modify (or just delete altogether), and opportunities to cut back in some other areas.
This is also very busy in large part due to the number of bills I still have (working on it though!). Some of the sinking funds I’ve been thinking of consolidating, but I’m wary of spending the money if it’s not specifically earmarked. Still tweaking though!
Do you have a system that’s working for you? I’m always open for ideas and suggestions!