I would love to see a post on adjusting your budget. How do you know when you need to increase your budget or when you need to decrease your spending? I LOVE your posts that give us questions to consider when making decisions. I would love to see questions to help me know if I should increase the budget amount for groceries or auto repairs whatever it is, or when we should cut back our spending. Thank you so much. -Melissa
This is such a great question, Melissa! I don’t think there are any 100% cut and dry answers or one-size-fits-all systems when it comes to when to raise or lower your budget. But I do think there are some general questions to ask before you overhaul your budget.
Here are five questions I recommend asking before you tweak your budget:
Questions to Ask Before You Tweak Your Budget
1) Are we struggling to make ends meet every month?
This is one of the most important questions to ask. If you are barely making ends meet every month (or they are not meeting every month) then it’s time to do a serious look at your budget.
Where is every dollar going every month? (If you don’t know the answer to this question, I highly recommend you check out Total Money Makeover from the library and follow the steps outlined to set up a budget. We’ve found that using software to track all of our expenses and income is so helpful to know exactly where we stand at any given moment of the month.)
If you do know where every dollar is going and you are struggling to make ends meet, it’s time to look carefully at whether there is anything you can cut, cut back on, or shave off. Don’t see anything you can change? What about looking into ways you can increase your income?
If you do know where every dollar is going and you aren’t struggling to make ends meet, then move on to the following questions.
2) Is it a causing stress and contention to stick to our budget in this category?
If you are finding that you are feeling stressed by a budget category every month, it’s time to take a hard look at that category, what you are spending, and why you’re feeling stressed about it.
For those of you who are married or who have other people who are involved in your budgeting, is this contributing to the stress? If so, why? Can you have an honest conversation about it without being frustrated or accusatory?
3) Why did we choose this budget amount in the first place?
Truth be told, I think this is possibly the most important question to ask.
Did you just pick a number out of the sky? Is this number the number you spent 5 years ago when you only had one child and now you have three but you feel like you shouldn’t change your budget because it’s what you’ve always had it set at? Did you choose this number because a friend (or someone online!) spends this on groceries or eating out and you wanted to prove that you could?
Take a hard look at the why behind your budget categories. Is the why in line with your priorities?
4) What does my spouse think?
If you are married, please do not be making budget changes without having a heart-to-heart conversation with your spouse. Budgeting is a team effort! It requires communication and compromise.
The less you can point fingers and instead lock arms and get on the same page, the stronger your budgeting success will be!
5) Could we find an easy way to spend less?
Do you need to be spending as much as you are spending in this category? Is there something simple you could change or tweak that would allow you to spend less? If you are thinking of raising your budget in one area, is there another area where you could lower it? (Check out this post for 30 Super Easy Ways to Save Money.)
As always, I think it’s important to remember that the goal of a budget is to serve you, not the other way around. A budget is a tool to benefit your life, not a slave master to make you miserable! (Psst! For more encouragement, read my post on We Need to Have an Honest Conversation About Budgeting.)
What questions do you ask before you change your budget? I’d love to hear!
I love how focused this is on making decisions together as a team, sometimes I find it’s easy to feel isolated when dealing with financial problems. Good to remember that if you’re married, you’re in it together and can lean on each other for support!
This will not be as articulate as I’d like but if/as you have a higher disposable income, it’s also really important to ask what your long-term goals are. I’m trying (trying!) to learn that if we are checking off a, b, c, d then I can spend the extra money to have dinner out or have my nails done. I hesitate to write that since I know some are not in a position to earmark money for a manicure. But I am sharing because we lived, unnecessarily, for many years like we were poor when we weren’t. Now if we needed to live on that tight of a budget, absolutely do it! But if you don’t have to, I’m learning to not be miserly about money because it can be an idol to stock up as much as you can.
Thank you for sharing your experience! -Jordan, MSM Team
Crystal Paine says
This is such a good reminder! Thank you for sharing!
Alyssa Cherry says
We just used #5 in my family- my husband had joined a new gym and I wanted to join as well but it was really expensive. Before I made the move, I comparison priced our internet bill (which had steadily been going up) and was able to cut $50 a month by switching providers while actually increasing our internet speed. I did the same for car insurance and saved an additional $75/month for identical coverage and was able to sign up for the gym without affecting our overall monthly bills (plus some)! While it’s still pricy, I feel much better knowing we’re not impacting our savings or other areas. Definitely recommend comparison shopping for services, especially if you haven’t done so in awhile.
Crystal Paine says
I LOVE that! Thank you for sharing!