[Y]ou’ve created a budget and you’ve been working to follow it faithfully. At some point, you may need to redo it to allow for changes in your life or to improve your circumstances. Here are a few ways you know it’s time to work on a new budget.
You Don’t Have an Emergency Fund
If you have nothing in savings, it’s definitely time to work on your budget. Even if you are meeting your monthly expenses, you need to have something for unplanned events. Look at your current budget and see if you can reduce expenses by at least a few dollars. Put that money away in a savings account each month.
You Have Nothing Left at the End of the Month
Another indication that it’s time for a new budget is if you only have a couple of dollars left on payday. There’s nothing left for emergencies or even for fun. Try to cut your current expenses so you have something extra. Set a goal of $25 or $50 left in your bank account on payday.
You Can’t Pay Down Debt
You’re able to make the minimum monthly payment on your credit cards, so you should be proud of yourself. However, you need to be able to pay off that debt even faster to reduce your interest. You should revisit your budget to come up with extra money that could go towards your debts.
You Aren’t Moving Forward with Goals
If you can’t save for a new car or home of your own, you need a new budget. Even if you aren’t ready right now, you’ll want these things or something else someday. You need to be able to save for the future or your budget really isn’t working.
A budget should never be stagnate. It should change with you as your needs and life changes. Make plans to look at your budget every year and see what you need to go to continue to improve your finances and life.
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