Oh no, you’ve done it again. You’ve overspent your budget. How could this happen after all the long hours you spent perfecting it? While nobody is perfect, here are some steps you can take to help you stay within budget and curb overspending.
Confession time: My wife and I haven’t always stayed within budget. Yes, there are times when we overspend our budgeting categories. However, I believe we overspend our budget less than most (if I may be bold enough to say so). And I’m happy to report that we’ve never over-drafted our checking account or come close to it since we’ve been married. I have to pat us on the back a little bit, you know?
4 Steps to Overspend Less Often (and Hypothetically Not at All)
1. Make a real budget.
For many, making a budget means writing down how much they should be spending every month. That’s not good enough people! Budgets should be zero-based, which means that you’re “spending” on paper every dollar you earn before the month begins.
Creating a zero-based budget is easier than you think. Follow the link to make one, and you’ll have a real budget that you’ll keep more often.
2. Don’t move money between categories except in extreme circumstances.
If you make it a rule to not move money between budgeting categories, you’re much less likely to overspend those categories.
If you rely on moving money between categories, you’re almost surely going to overspend. What’s the point of having budgeting categories if you don’t really use them anyway?
3. Keep up with your transactions.
I know, I know, it can be a pain to enter every transaction by hand into your budgeting software, but if you’re set up this way it’s something you should do. Not having an accurate representation of where you currently stand puts you on the fast track to overspending your budget.
4. Use cash in trouble categories.
If you find certain categories are difficult to get under control, try the envelope system for those expenses. There have been studies that have shown that you’ll spend less when you are spending cash as opposed to a debit or credit card.
What Should You Do When You Overspend?
If you overspend your budget, don’t get discouraged.
If you’re learning how to budget for the first time, believe me, you’ll probably overspend in certain categories every month for the first few months. This is completely normal. If you haven’t created or worked with a budget before, you’re not going to know your true expenses until you start tracking them. If you overspend, simply adjust your budget for the next month (but keep it reasonable).
I can’t stress this enough: Don’t give up! If you’re going to save money, get out of debt, build wealth, put your kids through college, and give more than you ever expected, you’re going to have to be in control of your budget most of the time. Remember, you’re not perfect, so don’t get down on yourself when you overspend. Just make sure you’re refining your budgeting techniques so that you don’t continually overspend.
Are you overspending on your budget? Leave a comment and let’s talk about it.
John, you make some great points here. My wife and I have definitely found it helpful in the past to use cash in trouble categories – especially in entertainment/eating out.
We have the same cash categories as well, including Groceries, Clothing, and Fun Money.
I used to split up our variable budget into categories as well… But lately I’ve just been putting it into one “pot” and it’s what we use for the week. We usualky have $300/week for our family of 6. Sometimes we spend little on food, other times more. Sometimes we need clothes & we spend more there, or we go out & spend more there. I was constantly “borrowing” from the other categories so figured why stress myself out & feel guilty over that. We were never going *over* budget, just need more for different categories some weeks…. So this works for us!
Your budgeting method actually is promoted by one particular financial expert, oh I wish I could remember his name! Thanks for your input Carla, I can see how your method would work for those who would get way too stressed out by mirco-managing everything, but I’m kind of a nerd like that. Ha. Thanks for being a reader of The Christian Dollar! Hope to see you in the comments more often.