Budgets do not always work as they should. There are months where it seems like Murphy’s Law is never going to leave you alone, and there are months when the stars align and your budget is perfectly balanced.
But what happens when the budget is broken and you need to fix it ASAP? There are no 24/7, 1-800 hotlines to call or magic pills to take to make your budget work again.
The key to fixing a broken budget is how you respond to it.
You can ignore the broken budget (not a good idea usually) — or you can work until you find the problem and fix it.
Here are 4 ways to find and fix a broken budget.
1. Know What Went Wrong
The first step in fixing a broken budget is to know what went wrong by asking a series of revealing questions:
- Where did you overspend? (Did you eat out often? Go overboard at a clothing store? Car repairs?)
- Could the expense have been avoided? (Meal-planning instead of relying on take-out? Making do with your current wardrobe? Not stopping at the coffee shop?)
- Or should the expense have been a part of the budget all along?
Answer those questions honestly, and you can begin working toward a solution for your broken budget.
2. Seriously Consider a No-Spend Challenge
A No-Spend Challenge is simply a month of no incidental spending. You will still purchase fuel for your car or pay for your transportation, you will still pay your regular bills, and you will still buy groceries, but you will spend zero elsewhere. That means no dinner or drinks out with friends, no take-out, no new clothes, no gift purchases, and no Starbucks.
The No-Spend Challenge is a great way to give yourself a reality check on how much you truly spend every month and where you can cut back in order to keep your budget in check.
3. Sell Your Stuff
Selling your stuff online or in yard sales is an easy and quick way to generate cash to help fix a broken budget. Grab a trash bag or laundry basket and go through your house, room by room. Determine which items you no longer need or want, which items are not useful to you, and which items are just taking up space. Quickly put them in your basket or bag — don’t overthink it. Then sort through this stuff for “sellable” items — free from damage and discoloration.
It’s a good idea to take photos of items and post them on eBay, Craigslist, or Facebook yard sale sites. The key to effectively selling your stuff online is to know how much the item is realistically worth. (Example: a portable CD player posted for $40 will probably not sell at that price point because it would be considered outdated; but a price of $10 would more than likely generate a sale.)
A quick turnaround equals more cash in your pocket to fix your broken budget.
4. Let Go of Items That Cost Too Much
You may not even realize that you are holding on to something that is costing you more than it should. Depending on how broken your budget is will determine how drastic of measures you need to take. For example, is that $450 per month car payment causing you to go over budget month after month? Could you sell it and buy a less expensive car with cash or even a lower car payment? Are you paying a substantial amount to have your hair professionally colored? Letting go of a nice car and opting for a box of hair color (or your natural color) is not easy – believe me, I know! Making both of these difficult choices to fix our broken budget was totally worth it, though.
If you’ve got big ticket items that are costing you each month, let them go and this will go a long way in helping you fix your broken budget.
A broken budget will not magically fix itself. It takes a lot of hard work and hard choices to make it work again, but it is very possible!