Not Made Of Money

Not many things are more frustrating than setting up a budget only to find that at the end of the month your financial expenses did not work out as planned. Even if the numbers show you operating in the red, you can use the information to make future changes in behavior. It is not a failure to miss budget goals, it is an opportunity for making improvements.

Let’s say for example that you budgeted $400 for food expenses during the month. Assuming that your original budgeted amount was adequate and feasible, an analysis of the bills can provide valuable detail to your spending patterns, and help you to gain insight on what might need some more attention. After adding up your receipts for actual food expenses you find that the actual amount spent was $550. Now is the time to dig deeper:

List the specific reasons you went over budget. Find all the items or events that caused the $150 difference and you may find that there are several different reasons. Was it eating out more meals than planned? A spur of the moment splurge on T-bone steaks for a holiday cookout for friends and family? Whatever the reason, by looking into the supporting receipts for details you can ferret out some important information that will help in future budgeting.

Look at spending patterns. Now that you have identified specific instances where your spending did not match the budget, look carefully for patterns that will emerge. Did you spend money to save time? Were any of your choices because of an inability to curb impulse spending or because you needed to project a certain image to someone? Assessing the patterns to the spending will help you to take steps to change them the next time the spending situations present themselves.

Develop alternatives for budget friendly choices the next time. For each reason that you listed, develop a way to counter this if it were to happen again. Perhaps some menu planning is in order or you need quick and easy recipes to get on the table at dinner time instead of choosing the drive thru or pizza delivery. Write down these alternatives and keep them in a place you can find them when the circumstances arise.

This process of analysis will take a little bit of time but you can gain very valuable information from it. During each step remind yourself that you are examining feedback and not casting blame for past spending. By gaining insight into your spending habits you’ll have the chance to respond differently when presented again with similar circumstances. By making little changes and practicing them until they become automatic, you will see yourself accomplishing your budget goals.

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