One mistake that many people make is thinking that their budget is set in stone. This can be an easy mistake to make. The reason it can backfire is that once you have gone over in a category, many people think they have blown the entire month, and then stop worrying about the money they are spending. It is important to realize that you can adjust your budget throughout the month, so that you never spend more than you make.
You should have some categories that will cover unexpected expenses. This may be an invitation for your child to attend a birthday party. It may be a required business lunch or a flat tire. These expenses can be covered by a miscellaneous category or you may have an emergency fund set up for the bigger ones. You may also have categories such as car repairs or gifts set up to cover these categories.
So what happens if you go over on your grocery budget one month? Do you run around in a panic and then stop tracking everything because you overspent? No you simply move money from one category into another. You may decide that you can skip dinner out so that you can pay for the extra groceries for the week. It may be that your electric bill is higher than normal, so you decide to transfer money from your grocery budget over to cover the bigger expense.
Realizing that you can change your budget throughout the month really opens the door to help you meet your needs. It can allow you to adjust easily to the changing circumstances. The key is to make sure that you do not spend more than you actually make each month. If you are flexible in the entertainment, food and miscellaneous categories you should be able to do this with no serious problems.
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