How to Give Your Budget Some Breathing Room

a person in a white button-up shirt sitting at a wooden table, counting one-dollar bills with an empty glass on a saucer next to their hands

Sometimes having a budget can make you feel squeezed for every last penny instead of giving you the freedom to achieve your financial dreams.  Take some words of wisdom from Rachelle, a Money Coach and Certified Credit Report Reviewer, on how to approach your budget when the going gets rough.

Challenge #1:  Turning Surplus Into Savings

When people work on a budget and prioritize their income to meet the bills, they are often surprised to discover money left over each month.  The problem is that Coaches often hear their clients saying, “I still can’t save!”

Words of Wisdom:  Rachelle suggests, “Try moving surplus money into savings – that way, the extra is not sitting in your checking account, tempting you to spend it.”

Take it one step further and get proactive with your irregular expenses.  Consider opening a second savings account for quarterly bills, so you’re actively saving up for those necessities and removing the temptation to spend that money elsewhere.

Challenge #2:  Losing Sight of Budgeting for Far-Off Goals

Your budget helps you allocate part of your income for the future, like completely paying off debt or funding retirement.  If the goals are years away from completion, it’s easy to lose sight of the finish line.

Words of Wisdom:  Rachelle reminds us to “celebrate the small moments, like remaining on track to pay down debts.”

When you’re running the financial race to meet your goals, it’s good to have cheerleaders (like a Money Coach) encouraging you to keep going, and a snack break to keep up your energy (like doing something small to celebrate).  For example, if you have a four-your plan to get rid of debt, set money aside to celebrate each year you get closer to your goal.

Challenge #3:  Spending on Something Special Means Overspending

Having your spending fully categorized keeps you organized and on track.  It gives you financial peace of mind knowing exactly how your money is working for you (and not the other way around), but when a special event arises, you feel like you can’t take part in it because it would mean overspending in a category.  You’re stuck!

Words of Wisdom:  Rachelle says, “If you have something special come up and want to spend more in a certain category, it’s okay!  Just make sure you’re planning around it and still meeting your other goals.”

Don’t feel like you’re fenced in; rather, think about how you might rebuild the fence.  In other words, consider your priorities, and reorganize.  When something comes up that’s really important and would mean overspending in a particular category, adjust the spending for that category (for that month) and see how you can reduce spending in other categories to make up the difference.

Challenge #4:  New Goals… No Room!

Sometimes, a new goal comes along and you’re not sure how to fit it in the budget.  As a result, you may find yourself…

  • Dismissing your goal, thereby getting discouraged and possibly creating future problems (e.g. what if your new goal was to save for retirement, but you dismiss it and end up with no savings?)
  • Putting money towards your goal without planning or adjusting your budget, thereby getting off track with the rest of your budget

Words of Wisdom:  Rachelle explains that “the key is just getting started and building from there.”

Even if it seems like you can only spare a few dollars, make it a habit and increase the amount when you can.  Taking that first step will give you momentum to move forward.  One of Rachelle’s clients, Karly, had this challenge, so Rachelle helped Karly adjust her withholdings, in order to put more money in Karly’s paycheck each month.  With that small change, they were able to put $50 a month towards a college fund for Karly’s daughter.

Parting Words:  Rachelle has worked with many clients, helping them build a budget for success.  She likes to remind them that “once you get off track, it’s easy to stay off track.”  Creating a budget isn’t a one-and-done kind of thing.  School supplies in August, gifts and parties during the holiday season, three birthdays one month and none the next….  Your budget changes with each month, so reviewing and updating your budget periodically is the best way to stay on top of things.

Working with a personal Money Coach will provide encouragement, accountability, and professional guidance on building a budget that works for you and your lifestyle, through every change and challenge.  Get started today by calling 888-724-2326.