5 Ways to Fix a Failing Personal Budget
Nearly one in three Americans maintain a detailed monthly budget, which is a disappointing number. If maintained, budgets can help you save money and stay on track with your spending. Most people experience a time when their budget fails due to unexpected expenses, and this is normal. However, if you are having consistent trouble staying on budget, there may be specific reasons why.
Your best bet is to actually add money to your monthly budget that is destined specifically for emergencies or unusual expenses — that way, the money is already in your account when you need it. In addition, sometimes prices change, which also affects a budget. As frustrating as it is to go over your budget regularly, you are still better off having a budget than not. Read on to learn how to fix five issues that often bring down a personal budget.
1. Budget for emergencies and extra expenses
You’ve probably heard the importance of an emergency savings many times before, and it is an essential part of maintaining a budget. You should have money saved for at least three to six months’ worth of expenses in order to protect you in an emergency. If you are unsure what your exact monthly expenses are, check out this emergency fund calculator. If you have no emergency fund right now, you should prioritize that as a big part of your budget until you have at least a few months’ worth of expenses saved. Then, if possible, set aside some money in your budget to save for your emergency fund each month.
You should also factor in unexpected (non-emergency) costs into your budget: include money for birthdays, school or work items, clothing, and so on.