When you first start a budget, you may end up overspending in some areas. If you have an accident, lose your job or another catastrophe, then you may find out that there is no way that you are going to make your budget for the month. You really have three options available to you.
The first is to not spend any money at all, since you have overspent for the month. You can make do with the groceries in your house, and stay home since you do not have any money to buy gas. You may just be hoping that your lights will not be shut off. This really is not a realistic option, unless you have food stored for such an emergency.
The second option is to just ignore the problem, and continue to spend as you normally do. Since you have already messed up, then there is no point in continuing to track the expenses for the month. Since you have already overspent, that new TV won’t break you. You might as well go out to eat as well, since you are no longer tracking how much you are spending. You can start over again next month, right?
The third option is to sit down and look at the expenses you have left for the month. You can decide how much you need for groceries and gas for the rest of the month, and then stop spending in every other category. Basically you will create a mini-budget for the remainder of the month. This is a very proactive choice. You may spend a little bit more than actually planned for the entire month, but you will not find yourself much deeper in debt than previously. You may just shift around some of your extra debt payments to cover your mistake.
To really manage your money, it is important to keep track of what you are doing with it on a regular basis. This should be at least weekly, so that you know where you are before you spend money. If this is too much work for you go to the envelope system. Once the money is gone, it’s gone. You will be surprised at how quickly you can turn the situation around, once you become proactive.
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