Budgeting is amazing……if you use it correctly.  Meaning, your budget will only give you what you put into it.  So, you have to be willing to do a bit of maintenance to make sure you are reaching your full budgeting potential.

Don’t worry, this isn’t too scary.  The maintenance I am talking about is creating a new budget every single month.  One of the biggest mistakes I see new budgeters making is creating a budget and then trying to use it for every month thereafter.

Your life will change which means, your budget will also change.  To some, this seems like an exhaustive, never-ending cycle of constantly managing your budget.  

Guess what?!  It totally is!  This is called budgeting!!  

The written plan for your money needs to change every month because you will have different goals and expenses every single month.  A budget is a constant work in progress, but the awesome thing is, it will continue to grow and change with you.

Think about it this way, you are using navigation, a route has been calculated so you freeze your phone and go.  Then, you hit construction. What do you do?

Duh!  You let your navigation re-calculate and figure out an alternate route.  You do this same thing with your budget. Otherwise, you are going nowhere fast!

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How to Create a New Budget Every Month:

First, you need to have a Family Budget Meeting.  Whether you are meeting with just yourself, an accountability partner or your spouse, you need to have time to decide what your plan for the next month will be.

The budget meeting will allow you to:

• Review your previous month
• Brainstorm ways to improve your spending
• Talk about your goals for the next month and year
• Assess your progress
• Set up next month’s budget

The meeting will require you to set time aside to focus on your budget at least once a month (I recommend more frequently, especially in the beginning).  This will make it a priority once it is on your personal schedule.

Setting aside time to focus on your budget will give you the opportunity to really be successful with it.  You will have the time to look at what you want to accomplish the next month. You can see what expenses you have coming so you budget appropriately.  You will tell yourself this budget is important when you carve out time for it.

The nice thing about these meetings is after you put them on your schedule regularly, they just become a habit.  This makes your budget a habit. This is huge for success!!

Related Post:

Family Budget Meeting:  Simple Steps to Follow For a Productive Meeting

Second, understand your goals.  At the beginning of every year, I recommend writing down your yearly financial goals.  These can then be broken down into monthly goals you can track. This will give you a much clearer focus on how you are progressing.

If you have financial goals you are working toward, you will be adjusting your budget accordingly.  Work within your goals to shape your budget. Your job is to shift your budget around to help you reach your goals.

Your budget will just be the tool that helps you become successful with money.  All you have to do is tell it how to help you.

When you are making your new budget for the month, check in with your goals.  Assess where you landed the previous month, where you are in the overall scheme of the year, and what you need to be doing in the next month to stay on track.  Working within your goals will help guide your budgeting.

It is vitally important to check in with your goals when you are making your new monthly budget.  You are in control of your success!

Third, look at your upcoming expenses.  This can totally be a make or break thing.  For the first year of budgeting, I swear we had more unexpected expenses than we knew what to do with.  I’m talking about doctor visits, annual subscription charges, oil changes, tennis shoes, birthdays, the list goes on and on.  

This can be really discouraging if you keep going over budget every month because of these expenses.  There will be a time when you first start budgeting where you have to discover what all of your expenses will be.  Be patient during this time and hang in there! You will go over budget in the beginning, but with time, you will be able to be more in tune with your exact budget needs.

When you are unprepared for these expenses that you should know are coming up, it can totally derail your budget.  Eventually, we wised up and started making little sinking funds for these unexpected, but totally expected expenses.

Sinking funds are like mini saving accounts for those expenses you know are going to come up, they just don’t happen every month.  These funds allow you to save little bits every month, so when the expense does come up, you already have the funds to take care of it.  No worrying at all!

Related posts:

5 Reasons You Need Sinking Funds

13 Sinking Funds Categories You Need in Your Budget

How to Effectively Use Sinking Funds

How to Track Your Sinking Funds + Free Printable Tracker

The other thing that will happen after you have been budgeting for 6-12 months, is you will be able to look back at all of your expenses during the past year.  This will let you highlight those infrequent expenses that happened once or a few times a year so you can prepare for when they will come up the next year.

By looking at our past expenses, I was able to figure out exactly when my husband would need new tennis shoes, when we would need oil changes, when we would have our eye exams, the frequency we seemed to need medications during the winter, how much propane we would use for grilling during the summer, etc.

The possibilities are endless when you start paying attention to your spending!

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Finally, check in with your debt snowball.  If you are in the middle of paying off your debt, this should be something you are monitoring and updating every month.  Whether you can add more to your snowball or if you had extra income you can throw at specific debt, you need to be monitoring your progress.

Depending on your debt payoff goals, you may decide you want to cut your budget in certain areas to shift more money over to your debt.  Your budget is all yours, and you get to decide where you want your money to go.

Related Posts:

15 Effortless Ways to Quickly Save $1,000

20 Weird Things I Did to Save Over $17,000 in One Year

After you have gone through all these pieces to your budget, make sure you have it written down.  This will be a written plan for your money for the month.

Every month will and should look different as your life moves forward.  You will adjust as needed based on how you did in the previous month, what goals you have, what upcoming expenses you have and how much money you are directing toward debt payoff.

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As your budget adapts to your life and goals, you will start to win with money!!  

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