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Over Budget

Getting Back on Track if You Go Over Budget

Sticking to a budget can be tough, especially if unexpected expenses come up. However, it’s important to do whatever you can to stay on budget, as going over budget regularly can lead to debt troubles. However, if you go over budget, there may be some things you can do to get back on track.

Here are some tips for how to handle the situation if you go over budget.

Don’t Give Up

If you go over budget, it can be tempting to throw everything away and forget all about budgeting. This is the wrong approach. Making one mistake or ending up in one bad situation isn’t enough of a reason to give up on the entire plan.

Budgets are important and everyone should have one. Even if your budget isn’t working out or if you did something you shouldn’t have and went over budget, that’s okay.

Figure Out What Happened

If you go over budget, one of the first things you’ll need to figure out what went wrong. There are many several different reasons you may have done over your budget. Did you lose track of how much you spent on a certain category? Did you put too much on your credit card without realizing until it was too late? Did you miscalculate or underestimate certain expenses when you were making your budget? Did an unexpected situation come up that caused you to spend more than you planned?

Whatever the reason, figuring out what happened is the key to solving your budget problems going forward.

Adjust Your Spending

If you go over budget, you’ll need to adjust you spending plan for the rest of the month so you don’t run out of money. If you spend more than you planned in one area, you’ll need to adjust your spending so you still have enough to afford all of your expenses.

For instance, if you typically give yourself $500 a month for groceries and $200 a month for entertainment, but you spent an extra $100 on food this month, cutting your entertainment budget for the month down to $100 can help you balance your spending.

If you look at the numbers and find that you can’t make things balance this month, you have a couple of options. Once is to contact those organizations whose bills you have not yet paid, explain your situation, and ask if there is anything they can do. Another option is to return purchases you made recently, if this is possible. You may also want to consider putting off some of the purchases you are planning to make this month. Borrowing money from friends and family (for the short-term) may also be an option. You may also want to think about selling some of the things you own online or at a yard sale. This can help you earn some extra money to make ends meet.

Try to avoid putting purchases on your credit card – even if you’ve gone over budget – unless you have a plan for how you will pay your card off. Otherwise, you could end up in serious debt trouble quite quickly.

Determine if it is Likely to Happen Again

Once you understand what happened, and planned to fix it in the short term, you’ll need to figure out the likelihood of a similar situation happening again. If you went over budget because your refrigerator broke and you needed to buy a new one, this isn’t something that is likely to come up again (though having an emergency fund can help avoid these situations. More on that later). However, if you went over your budget because you spent more on gas than you budgeted for, you’ll have to look at why that happened. Did you drive more this month than you usually do? Is this something that is likely to continue? If it is, you’ll need to adjust to budget going forward to account for this additional spending.

Rethink Your Budget

Once you know why you went over budget and made temporary changes to your budget to make ends meet, it’s time to think about whether you should make those changes (or other changes) permanent. If you realize that you seem to spend more every month in a certain category than you’ve budgeted for, it’s a good idea to rearrange your budget to reflect reality.

Save for Emergencies

Having an emergency fund can help you avoid going over your budget. Even if you’re only able to put a few dollars aside every month, it will add up over time. Then, if an unexpected expense comes up, you won’t need to break your budget to pay for it.