This article is being presented in partnership with the Society of Grownups.
Life can be pretty unpredictable, so rigid budgets often don't work over the long term. While it would be great if you could neatly categorize your life and spend the same amount in each bucket every month, many people who have tried budgeting would agree: That's just not how it works.
Even for me as a financial planner -- someone who helps other people build budgets on a regular basis -- I often find that I have to adjust my own budget or apply new strategies as life changes. See, budgeting is a really helpful tool for most people when it comes to managing finances and achieving goals - it just needs to be flexible.
So how can you build enough flexibility into your budget to stay on track without getting frustrated or losing sight of your goals? Here are five tips to make your budget more flexible and thus more successful.
1. Check in more regularly.
One common mistake is treating budgeting like a one-time activity. Many make a spending plan and then sit back and hope it all works out. (Spoiler alert: It rarely does.) And that's not because they did a "bad" job budgeting -- it's because life is complex, and even the best plans need a little adjusting along the way.
Instead of throwing out your budget with the bath water, try a weekly check-in where you review your past week's spending and determine whether you need to make any changes going forward. Weekly may sound overwhelming, but try it for a month or two, until you get more comfortable with your budget. Then you can cut back to monthly or whatever cadence makes sense for you.
By using this strategy, it's easier to course-correct; if you went off track one week, you can make sure it doesn't get totally out of control.
2. Get hands-on.
While I'm all for automation and using personal finance technology, it can help to be very hands-on with your budget at the beginning.
I personally like to keep track of my budget using a spreadsheet. Most banks and credit card companies will let you download your transactions, which you can then upload into a spreadsheet and categorize by hand. This helps me be extra cognizant of what's going on with my budget and where I'm spending my money.
And remember: If something isn't working for you, you can always try something new. Just because a certain tool isn't helpful doesn't mean budgets won't work for you at all.
3. Balance specifics with flexibility.
Some people ask me how many budget categories they should track. I usually advise them not to get too detailed. Some budgeting tools can make it easy to go overboard with categories and subcategories. That may give you a sense of control, but it may also make budgeting so complicated that you dread dealing with it each month.
For example, I realized I didn't need to know how much I spend on grocery shopping versus eating out. I can roll all of that into a "Food" category, and it's just as meaningful (plus it makes it way easier to manage that bucket of my budget).
On the other end of the spectrum, some people use systems like the 50/30/20 rule, which breaks up budgets into three categories: savings, needs and wants. This can work for some people, but it's usually not ideal for the beginner budgeter. If you're just starting out and thinking, "I don't even know where my money goes each month," you'll probably want your budget to be more specific.
4. Don't make excuses -- make a plan.
As a professional, I'm here to tell you: Everyone goes over budget now and then. And you can always come up with a reason why you didn't stick to your budget: a wedding, a birthday gift, a last-minute trip you couldn't pass up. While it's totally OK to have unexpected expenses, it's not a good idea to make excuses month after month, because you'll never be able to get your budget under control this way and you could quickly wind up in debt.
Consider setting aside a small amount in a short-term savings account each month. That way, if you go over budget or realize you want something that you hadn't planned to spend on, you can dip into this slush fund without wrecking your financial plans.
This account would be separate from an emergency fund, since its purpose is to help you keep your budget under control on a month-to-month basis, not to pay for large unexpected expenses like a hospital visit or an unusually high vet bill.
5. Make time for reflection.
I often recommend that people get "under the hood" with their budgets now and again. That means taking time to reflect on how you're spending money.
Rather than judging yourself or succumbing to guilt, pick a time to look back at your spending over the last month and ask yourself whether you're happy with the way you spent your money. Are there things you'd rather have spent the money on? Will you value the things you did spend it on in a month? A year?
If your budget isn't consistently lining up with your values, this can be a good catalyst to adjust your spending based on what really matters to you. Again, there's no need to feel guilty -- just focus on how you can change your behavior in the future.
Remember, budgeting is about building a system that helps you align your spending with the things you value most. Hopefully you can apply some of these strategies to help you make your budget work for your messy, complicated, awesome life.
About Society of Grownups: Society of Grownups is a learning initiative, created by MassMutual, that is dedicated to fostering financial literacy among twenty- and thirty-somethings. It is a place, online and offline, where people can go to talk openly about money and to learn, from both professionals and one another, about things like negotiating salary, buying a home, planning for a family, and saving for retirement. Offerings in the space include classes, chats, supper clubs, events and one-on-one sessions with Certified Financial Planner™ professionals.
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