Has your budget gone off the rails a bit lately? Don't beat yourself up too badly, because it happens to the best of us.
But first, identify your spending pitfalls
When you realize your monthly budget has gone sideways, the first thing you should do is sit down and figure out where your money went thus far in the month. Download your bank transactions and bucket them into categories. What stands out as being out of balance? Lots of clothes shopping, maybe? Too many stops in the drive-through? Fast and loose with your grocery shopping? The last thing you'll want to do is repeat the same mistakes next month. Identifying where you went off the rails will help you figure out what area(s) you need to lock down now, but also get control of next month and beyond.
For the rest of your month, you've got to lock down your budget and stop the financial bleeding. Here are five things you can do to get your budget back on track and get control over your money again. Remember, right now this isn't about fixing the disease that caused your pain, it's about applying some quick first aid and getting things set right.
1. Review Your Current Budget.
If you didn't make a budget for this month, jot one down for the rest of the month. What fixed costs do you still have to cover this month? Fixed costs include your car payments, credit cards, utilities, etc. It's the stuff that's pretty much immovable. What's coming up due? How much do you still have in your account, and what paychecks will be coming in?
You need to know what your fixed expenses are so you can identify how strict you're going to have to get with your variable expenses through the end of the month. Your variables include eating out, groceries, shopping and other entertainment. Basically, anything that doesn't come in your door with a bill.
2. Go on a Spending Freeze.
This is also known as "making do with what you have." The fastest way to get your money to behave is not to spend it. Lock everything down that isn't in your "fixed expenses" category. Try and make things last until next month. Don't go out to eat. Take your lunch from home. See if you can hold off another few days before you have to get new laundry detergent by combining loads and using every last drop or granule. Check out movies from the library (free!). Go an extra couple of weeks before you get your hair cut or colored. Use all those leftover soy sauce packets from takeout instead of buying a new bottle at the store. You get the idea. See if you can stretch things out a bit. Commute by bus or train from the park and ride instead of driving all the way to the office. Challenge yourself, and see how creative you can get!
3. Switch from Debit Card to Cash.
Even if it's just for the remainder of this month, take what you would have spent on groceries, at the gas station, etc. and take it out of your account in cash. This is essentially what people call "the cash envelope method." You don't have to use envelopes. You can get the same effect with less bulk in your wallet by using a paper clip and a post-it note to label each category. When the money's gone for that category, you're done spending. Period. You'll find you pay much more attention to your shopping cart when you know you've only got $75 left in your wallet and you can't go over.
There's also something very real about paying with cash. Your brain recognizes that money is being spent when you have to fork over a $20 bill and get $2 in change. Using plastic distances you from your purchases, and it's easier to think that you're spending less than you really are. My husband's debit card got demagnetized recently, and until he could get into the bank to get a new one, he lived on cash for a week. His weekly spending was much lower that week, because of slight inconvenience and that physical reminder that cash provides.
4. Cook at Home, and Shop Your Pantry & Freezer.
Time for a crash course in meal planning! Take a look in your pantry and your freezer. What meals can you build with what you've got? Make a game of it, and challenge yourself to put complete meals on the table (don't leave out the fruits and vegetables) with what you already have. Get creative and plug some of your ingredients in on the Food Network site or Taste of Home, and see what comes up. You might be surprised at what you can whip up starting with a can of tomatoes and a pound of ground beef.
5. Meal Prep, Meal Prep, Meal Prep!
You know that old saying, when you fail to plan, you plan to fail? One of the worst spending faults we have in our house is buying a meal because we didn't plan one. This could be that we didn't pack a lunch the night before, and then didn't have enough time to throw something together in the morning when leaving for school and work. Or maybe we had a chicken dish on the night's dinner menu, but we forgot to take it out of the freezer.
A made-at-home lunch could cost you as little as a dollar or two, but stopping at the corner deli or drive-through will easily run you closer to $10... for just one person! Start making sandwiches, or package your leftover dinner in a single-serving sized container so it's easy to grab and reheat tomorrow for lunch. Trust me, this is a real budget saver!
Bonus tip during the school year: brown bag it.
In our school district, we pay $3 per child for hot lunch. For my two kids, that's $3/meal x 2 kids x 5 days = $30 each week, or $120 per month! I can pick up a pound of deli meat at the grocery store for between $5 and $7 on sale, and a loaf of bread goes on sale for between $1 and $1.50. Buy the fruit that's on sale that week (I found a three pound bag of lunch box-sized apples for $2.50) and fill out the rest with home-packaged crackers, granola bars, etc.
I've found I can pack five days of lunches for my family of four and spend around $20 in a week - that includes giving my kids 50 cents each day to buy milk at school. Granted, if I had teenage boys I'd be spending more, but you get the picture. (PS - if you have teenage boys, you have my utmost respect and are truly a miracle worker to feed them. Really. You deserve a medal!)
You now have five ways (well actually six if the school lunch tip applies,) to whip your budget back into shape before the end of the month. Good luck! If you have another tip, feel free to leave it in the comments.