Last week we built a foundation for our budget. Now we need to track our purchases for a few months to determine if it works for us. If you haven’t followed our budget series so far, here are the links to previous posts regarding our process.
Calculate your savings needed to reach your goal
Find a budget that works for you
Track everything for the first month or two
Adjust
Review your progress
As I explained last week, the most difficult part of budget planning is now finished. Now that we have our categories completed, it’s all about putting the right transactions into the right group. This week’s post will be shorter than most, as all we need to do is collect data so that we can decide if we want to make changes in the future.
For the first month I would recommend reviewing the budget at least weekly. If you’re using an automated platform like Mint, this should only take around 2-5 minutes each week, and will allow you to keep track of your progress throughout the month. As you become more familiar with your habits, you may decide that you need to check it less or more depending on what information you want to acquire. Even after all of these years, I still check in on my budget 7-10 times per month to make sure I am on track to hit my monthly goals.
This part of the process is all about being aware of our spending habits. It will give us a baseline of how we use our hard earned cash and may supply us with some surprising information. We don’t necessarily change our budget yet, as we want to compare our spending reality to what we expected when we set our budget up initially.
Once we have tracked a few months of our expenses, it will be time to adjust the budget for any changes we want to make. I will cover how to do this next week.
