Updated on October 16th, 2019
Creating a budget is just the first step. If you want to reach your financial goals, you’ll have to maintain your budget as well. As life constantly changes, your finances change right along with it. Whether you just landed a new job, started a family, or finally paid off your student loans, your budget will need to be adjusted throughout your life journey.
The often difficult part of maintaining your budget is actually knowing when to make these adjustments. Let’s review a few life scenarios that require you to revisit your budget.
Since the foundation of all budgets are based on how much money you make, if there are any changes to your income, you’ll need to adjust your budget. This can include gaining income from scenarios like receiving a promotion, inheriting money, or starting a new side hustle. Income changes can also include losing money from unfortunate events like losing your job or a slow month in your business.
Another reason to revisit your budget is when you take on new debt. At times, taking on more debt can seem almost inevitable. If you have to add debt to your finances from items like a new house, car, or personal loans, you’ll want to adjust your budget. This will ensure you can meet your debt payments while still tracking to your financial goals.
Completing a financial milestone like paying off your credit card, mortgage, or student loans also requires you to revisit your budget. Reaching these milestones will free up your income, allowing you to boost your contributions to items like an emergency fund or investments.
Another reason to revisit your budget is when you experience a major life change. Life events like getting married, having a baby, moving, or getting sick can be great financial adjustments. Take these opportunities to review your budget and make changes if necessary.
In certain situations, your budget might not be working for you even without any new changes in your life. If you’re struggling financially, it’s a good time to revisit your budget. Analyze your budget to see if there are any opportunities to cut back on spending, increase income, or even to lower your budgeting goals.
While there are no specific rules for maintaining your budget, making adjustments based on these life scenarios can serve as a great guide. If you want to revisit your budgeting plan more frequently, set a monthly review where you can analyze your spending and make small adjustments to your budget along the way.