| credits: singlemindedwomen.com
Having
a budget is the first step toward financial freedom, security, and
success. But just creating a budget isn’t enough – it has to be a budget
you can stick with; one that works for you, not against you. Here are
five signs that it’s time to reevaluate your budget.
1. Consistently financial restructuring at month end
Everything seems fine and dandy at the
beginning of a new month. But as the weeks pass, things begin to change.
You might be overspending in certain categories or dealing with
unexpected costs, but whatever the reason, toward the end of the month,
you are forced to make major changes in your budget.
Remember, your budget should keep you in
line and on track from the first of the month until the last day of the
month. If you consistently find yourself having to make changes, just
to make ends meet, something isn’t working out.
Tip: Take a look at your budget every
time you write out a check, use cash, or make a purchase with your debit
card. This will ensure that you stay on track throughout the month.
2. Over reliance on credit
Using credit cards if you are
responsible enough to pay off the balance monthly isn’t a problem. But a
problem does arise when someone relies solely on credit to get by. If
your budget is broken, you may notice you depend upon your credit cards
to make ends meet, especially at the end of the month. This is a
telltale sign that your budget is in desperate need of attention, and
should not be ignored.
3. Your books never balance
The money that you have at the
beginning of the month needs to cover your expenses until the end of the
month. Your budget and accounting system should appropriately reflect
this. If it doesn’t, it may not seem like a big deal at first. But the
risk is that a long-term imbalance in your books will become a massive
issue.
4. Increasing financial fights with your partner
A bad financial situation can begin to
take a negative toll on your life and relationships. “Your budget never
works”; “We never have any money”; or, “Why do we keep spending money on
this?” are phrases that might come up if you’re consistently fighting
with your partner about your finances.
Instead of “we never have any money” you
should focus on “why don’t we have any money.” This gives you the
chance to work together to find a solution.
5. Always borrowing money from friends and family
This sign, above all else, is one of
desperation. Taking money from a retirement account should never be an
option, as the penalties can be very high and a large financial blow.
Along with this, borrowing money from friends and family runs the risk
of souring your relationships. This is something that can have a
negative effect on your budget, as well as relationships with other
people.
As tempting as it may be, borrowing from
friends or family, or taking money from your savings or retirement is a
mistake. Make a rule: you will only do this under the most desperate of
times, and if you have exercised all other options. If you need to
borrow money to eat and pay the rent, so be it. If you need to borrow
money to go to the movies and dinner, you are out of luck.
The final word
Living with a broken budget can damage not
only your finances, but also your relationships with those around you.
So, it’s important to be able to pick out the signs of a cracked budget,
in order to implement the changes that will fix it in the long run.
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