If your 2015 New Year’s resolution was to improve your finances and stick to your budget, after taking steps to put this plan in action, maybe this is about the time that you are asking yourself ‘how am I doing? Sometimes we have good intentions and have strategies and steps to take to revise our budgets for the next chapter of time, however one common problem that occurs lies with our ability to follow through and evaluation our progress.
Part of the success of any budget is to periodically check in to make sure you are on the right track – and also that you do not go too long without doing so. So just when is it a good time to check in on your current expenses – and your budgeting prowess?
Well, I’m glad you asked … just as many businesses separate their financial periods into quarters – you too, can perform a tally of your 1st quarter expenses and make sure you are doing right by your budget. By taking into account that the 12 month calendar is divided into 4 quarters – this makes sense that now 4 months (January – April) have almost gone by since the beginning of the new year – and the ideal time to revisit your previous financial productivity.
So, now that you are aware of when to check in on your budget – while there are various methods of doing so, here is a list of steps you can take to make sure you are on the right track this quarter.
1) Total Up Your 1st Quarter Income and Expenses:
Listed on your budget should already be your incoming funds as well as your current expenses. While you may have thought you have accounted for all of these back in January – now is the time to check to see if you have had to add any costs to both of these categories. To check your budget, at this point in time you will want to total up your income and your expenses, and determine the values for each.
2) Are you Expenses Higher than Your income?
This stage is really where you will see how you have been doing during the previous quarter. If after totalling both columns, you see that your expenses are far higher than your income – you will notice that you have in fact been losing money over the past few months. As a result at this stage, you will need to look at revising your expenses. Alternatively, if you have found your income and your expenses are either even or your income is higher, you can congratulate yourself for a job well done – and the fact that you have been able to manage the budget you set at the beginning of the year.
3) Revising your Budget & Cutting Down on Expenses
If however your situation does fall under the first scenario, then this is where you will want to take steps to revise your budget. How will you do this?? At this point in time, your best bet is to look at where in your list of expenses you can reduce your costs. Are there areas of your expenses that you can cut out completely? It may be that your expenses are larger than your income because you have some unnecessary purchases that can be eliminated completely. If some, however are purchases that you need to make – can you reduce the cost by switching to a different product, company, or reducing the quantity you’ve been buying? This will of course be a personal decision that will take different shape and form for everyone depending on their needs – so identifying the areas you can cut down on for yourself – will be key.
Once you have resolved this situation for yourself as best as you can, you can revisit your budget and set new parameters for what you can spend, what money you have coming in, as well as if you can save some money at the same time.
Hopefully, you have found that your income still exceeds your expenses – even if it does ever so slightly – and therefore you can consider this a win. If again you realize that you are spending more money than you have coming in – you can take action and follow these steps to make sure at the next quarterly milestone you have hopefully improved the situation for yourself.
Overall, it is actually very common to find that you have not been able to stick to your budget as closely as you had planned for. By checking in on your progress every quarter – or every few months, you can work to continue to manage your finances more efficiently moving forward – by staying on top of the situation as you go and reassessing what changes need to be made in the interim.
As always, good luck my fellow budgeters!
