Picture this. You are cruising along life’s highways with the wind blowing in your hair when all of a sudden your car makes a horrid thumping sound and stops dead in its tracks. Have you ever had that happen to you? I’m sure most of us have. If you imagine your budget as the car you’re driving in, you have probably felt a bump or two along the way. Those bumps are your budget’s way of telling you it needs a tune up. Take a look at these five signs of your budget being out of whack and then take a look at your own. If you have any of these things going on, it’s time to get down to business!
1. You are having trouble making “ends meet”. There is a difference between things being tight and having to shuffle around bills to make ends meet. If this is you, your budget probably needs a tune up. When you have to shuffle around expenses it can mean you are overspending somewhere that you shouldn’t be. Take a look at your budget with fresh eyes to see where you can cut your expenses.
2. You haven’t updated your budget in more than three months. Budgets are not static. Instead, they are fluid by nature and need to be updated regularly. If it has been more than three months since you’ve last updated your budget, it’s time to sit down and see if there has been any changes. Ideally, you should look at your budget every month to avoid budget blindness, but if you don’t want to do things that often then make sure you at least make it a quarterly affair.
3. Your chequing account is overdrawn. Unfortunately, this situation is a big, BIG red flag. Stop spending immediately and pull up every transaction you’ve had for the current month. Rework the budget using your current bills and your remaining income and work on putting your chequing account back in the black again.
4. You haven’t been tracking your expenses and have no idea where your money is going. One of the biggest ways to really get off track with your budget is by not tracking your expenses. In a perfect world, you should be tracking everything including cash purchases, but at the very least make sure you are tracking any expenses coming out of your bank account. If you haven’t been doing this, pull your budget into the “shop” and put it up on the racks to tune it up!
5. You think there is a problem. Trust your intuition! If you are worried there is a problem with your budget, there is a good probability you are right. Take the time to look it over and adjust things as needed.
Messing with your budget isn’t something you want to do, but it goes with the territory of staying on track financially. Be vigilant and watch for these warning signs and you are well on your way!