We are approaching month 8 of our 12 month calendar. How does your budget look so far this year? Are you keeping track of all of your spending?
It is always a good idea to look at your budget a few times a year and see how it is going. As always you should ensure that you are spending less than you make, and have a portion of your income that you can invest.
Why do you need to analyze your budget throughout the year? Costs change, income can also possibly change. My rent just increased for my apartment. I had to make extra funds available. If you get a raise or a promotion, your income can increase. If you have a sales role or job in the oil and gas industry, then your income has most likely decreased. There are a lot of scenarios.
Spending habits change. Say when you started the year you assumed you would spend $200 a month in eating out; however, you now realize that the amount is closer to $300 a month. You need to find out where else you can cut $100 worth of expenses from another category.
Follow these 3 points for your mid-year budget review:
1) Make sure you are making more than you spend and aren’t incurring a deficit every month
2) Analyze each category and make sure that your allotted amount is close to your actual spend amount
3) See if there are any new categories you need to add, or one that you might need to delete. I paid off my student loans, so that category isn’t needed for the remainder of the year.
Follow these steps and find budgeting success.
Budget Smart, Invest Wise