Have you ever had the best intentions when it comes to money, but just totally blow it by overspending? It can be hard to get your budget back on track when you’ve gotten yourself into a hole. Thankfully, you do have options if you want to turn your finances around!
Below are 5 things you can do to get back on track with your money:
- Identify the problem.
- Evaluate the situation.
- Make a budget.
- Give yourself grace.
- Set new goals.
In this article we will dive deeper into these 5 steps to help you get your finances under control. You’ll also get extra tips to help you stay on track with your finances in the future.
1. Identify the problem.
You got off track with your budget or money for a reason. Something happened, or maybe something didn’t happen. Regardless, you have to be honest with yourself.
Ask yourself these questions to try and identify what went wrong:
- Were you trying to keep up with all of your friends and everything that they own?
- Were you unprepared for the month and didn’t write out a budget?
- Did an unexpected expense pop up?
- Did you cave to impulse spending again?
No matter what the problem was, you have to identify it and face it. Make sure this problem doesn’t happen again in the future. Be proactive and set up boundaries to prevent this from coming up again. For instance, if an unexpected expense popped up, maybe it’s time to set up sinking funds. Or if you bought something “just because,” then maybe it’s time to deal with impulse spending.
Once you know the problem, you can move forward financially.
2. Evaluate the situation.
The best way to move forward with your finances is to face your financial truth. This means that you’ll need to start tracking your expenses and be honest with where you stand with your finances and money.
To get started, print your previous month’s bank statement and evaluate your spending and money habits. Grab a calculator and total up how much you spent on unnecessary purchases.
Ask yourself the following questions to help you evaluate your current situation:
- How much debt do I have?
- Did I use a credit card unwisely while I was off track?
- Did I take money out of savings to buy something I didn’t need?
- What can I do moving forward to get back on track with my budget?
When you’re able to evaluate your current situation, you can know exactly where you stand so that you can take the next steps to move forward. Be honest with yourself about your money. Although this can be a difficult step to take, it is necessary if you want to move forward financially.
3. Make a budget.
If you are trying to turn your finances around, then you need to be one of the 32% of Americans that actually creates a household budget. This tool can truly help get you back in shape.
Budgeting doesn’t have to be overwhelming. When you have a guide that shares the easiest budgeting method ever, you might actually look forward to writing a budget each paycheck! Budgeting allows you to be intentional about where you are sending your money.
If the idea of writing a budget makes you cringe, then try to make it fun. Turn it into a budget party by playing some music, eating your favorite snacks, and have a glass of wine (or two).
If you have a partner, be sure to include them fully when you’re working on your budget. If your partner is hesitant to write a budget, then try these 6 ways to get them on board with budgeting.
If you have older children, include them in the budget making process. This is a great opportunity for you to grow as a family as well as teach children the importance of financial responsibility.
4. Give yourself grace.
No one is perfect. No matter how often you write a budget, chances are something unexpected will pop up. There will be times when you make an unplanned purchase. That’s life! The truth is that even the most expert budgeters probably won’t follow their budget perfectly.
Remember that a budget is simply a tool or guide for how you want to spend your money.
It is a flexible document that can be changed at any point. Read more about how mini-budgets allow our family to stay on track with our money every single month.
When you’re able to give yourself grace with your budget, you’ll be more likely to continue budgeting each and every month. Giving yourself grace looks like forgiving yourself for your past money mistakes and putting a plan in place moving forward.
One way to give yourself grace with your money is to set up a buffer in your budget every single month. A buffer is another line item in your budget that allows you to account for any unexpected or unplanned expenses that might pop up. Even just a $100 buffer every single month in your budget can help keep you on track with your money.
A buffer can cover expenses such as:
- An extra tank of gas that was unplanned.
- A bill that was $30 more than you had planned.
- A $15 birthday gift for a friend that you forgot to include in your budget.
- An extra coffee at the end of a difficult week.
Be sure to add a buffer to your budget and practice grace for you and your partner every single month!
5. Set new goals.
Once you’ve written a new budget, it’s time to set a few new money-related goals. Although your long-term financial goals might have not changed, it’s important to set a few short-term money goals.
Once you’ve figured out why you’ve fallen off track with your money, you can set new goals in place to help hold you accountable to not go back down that road.
For instance, if you struggle with online shopping, then consider setting a goal to cut out any online shopping or Amazon shopping for an entire month. This type of reset allows you to see immediate progress and even gain back the confidence that you desire!
When you set short-term goals, you are giving yourself an opportunity to:
- make progress.
- prove that you are capable of achieving your goals.
- and give yourself a reason to keep doing what works!
One easy way to set and track goals is by using a monthly goal tracker. I’ve personally created a FREE money goals tracker that I use every single month. I actually look forward to tracking my success each day for a month!
Tips To Stay On Track With Your Money
Once you’ve gone through the steps to get back on track with your money, you’re likely to see success! If you want to fast-forward your money success, then check out these tips to help you get your budget back on track.
Set up sinking funds to save money
Sinking funds make saving money simple, easy, and doable! A sinking fund is a strategic way to set aside money for upcoming costs. These can be expected or even unexpected expenses.
It’s important to set up sinking funds for expected expenses. For instance, our family saves money every single month for Christmas. We know that every December we will be spending money to cover gifts, holiday activities, and pictures with Santa. Instead of going into debt every December to cover these costs, we save money each month for Christmas. Once December comes around, we have enough money to pay for everything. This not only helps us financially, but also keeps our stress levels low so that we can enjoy the holidays.
You’ll also want to set up sinking funds for unexpected expenses. For instance, if you own a car, you know that there will come a time when your tires need to be replaced or your brakes need to be fixed. These sometimes come up at an unexpected time. A car maintenance sinking fund helps cover the cost of these repairs so that you can stay on track with your budget.
Head on over to my entire sinking funds guide where you can learn even more about how sinking funds can help you save money. By setting up sinking funds, you’ll be more likely to stick to your budget over time.
Use cash envelopes
If you’re struggling with controlling your spending or staying on track with your budget, then it might be time to give cash envelopes a try! Cash envelopes can help you stay on track with categories of your budget where you tend to overspend.
The idea is simple:
- Determine how much money you want to budget for a certain category (such as groceries).
- Pull out that much cash from your bank and place it in an envelope.
- When it’s time to buy something from that category (like when you go to the grocery store), use the cash in your envelope instead of your debit card or credit card.
- When you’re out of money, you can no longer buy anything for that category in your budget!
The cash envelope system helps create a boundary for you and your spending. It allows you to stick to your budget in areas where you are more likely to go overboard. It has helped our family learn how to get back on track with money over the years.
Ready to try the cash envelope system? Check out my entire guide to cash envelopes. You’ll even get access to FREE cash envelopes that you can print from home today!
Deal with impulse spending
Many times people fall off track with their budget because they struggle with impulse spending. The good news is that you can beat the urge to spend money impulsively!
The best way to deal with impulse spending is to determine why you are wanting to spend money without thinking. When you feel the urge to spend money unplanned, ask yourself these 3 questions:
- What feeling or emotion am I having that’s making me want to spend money?
- Will buying this item help me reach my big goals?
- Who will I be without the item I’m wanting to buy?
When you’re able to honestly answer these questions, you might find that you don’t even want to buy the item that you’ve had your eye on! Instead, you’ll be able to deal with whatever emotion or feeling has caused you to want to spend money. Plus, you’ll be on track to meet your money goals!
Try a No Spend Challenge
If you need a jolt to your system when it comes to spending money, then it might be time for a No Spend Challenge! This is a perfect way to save money fast and work on your spending habits at the same time.
The wonderful thing about this kind of challenge is that you can make it fit your specific needs. You can choose to cut out spending for one day each week, an entire week, or even a month! If you’re interested in what’s allowed and what’s not allowed in a no spend challenge, then head on over to my No Spend Challenge guide.
Give yourself a spending allowance
Allowances aren’t just for kids! By giving yourself a spending allowance each month, you’re giving yourself permission to spend money on yourself. If you struggle with extra spending here or there, then just TRY giving yourself a spending allowance. (I personally keep mine in a cash envelope).
You can spend your allowance on practically anything. Whether you want to grab that extra coffee or indulge in a lunch out, your spending allowance can help cover it. These types of categories in your budget makes sticking to your budget doable. It allows you to still live a little and not feel deprived in the process.
Find an accountability partner
There is power in numbers! When you have someone else cheering you on along the way, you’ll be more likely to actually turn your finances around and stick to your budget. Your accountability partner can be anyone that motivates you and is on your side.
They are the person that you turn to when you really want to buy something you don’t need. Instead of encouraging you to get the item, they tell you to put that debit card back in your wallet and take a walk instead. They are also the people that will celebrate your success, both big and small!
Surround yourself with motivation
If you want to make sticking to your budget and finances a lifelong habit, then it’s time to consume content that will motivate you each and every day.
This means that you’ll choose books to read that educate and empower you. Listen to podcasts that motivate you to stick to your budget and change your future. Some of my favorites are This Is Awkward, Popcorn Finance, and So Money.
Follow people on Instagram that bring you encouragement such as @carolinevencil, @makerealcents, and @hisandhermoney. Likewise, unfollow or mute others that tempt you to spend money!
The Bottom Line
Ultimately, getting back on track with your budget and money is doable. By following the 5 steps laid out in this article, you’ll be able to get back on track financially and make your budget work for you!
