Every month, receive financial wellness tips and participate in a financial challenge.
Did you participate in the April Money 2020 Challenge?
May: Stick to ALL of Your Budget Categories
As we learned back in February, about a third of Americans don’t have a budget. Of those 67% with a budget, it’s likely that a lot of them go over their budgets and struggle with the balancing act of budget maintenance. This month, we’re going to focus on staying in budget for ALL of our expense categories.
Money 2020 is a monthly newsletter series that will help you achieve your financial vision – whatever that may be. Each month we will focus on a different theme, and we’ll include a small challenge related to that theme. This month’s theme is staying in budget in ALL categories.
This month’s challenge is to stay in budget for ALL of our expense categories. When you’re making your budget for the month, think about things like holidays, birthdays, and trips that may be happening this month that you might not usually budget for. Don’t forget that we’re making a zero-based budget, meaning that every dollar has a specific, predetermined job. Don’t forget about the Envelope Method and Gift Card Method that we learned about last month.
If you go over budget in a category, don’t worry! Sometimes unexpected expenses come up, or we just have a moment of thoughtless spending. This doesn’t mean that you failed the challenge! The important thing is to return to your budget and adjust accordingly by removing money from other areas to make up for it. Where you cut down will depend on your lifestyle and expenses, but avoid making budget cuts from savings, debt, and necessities. When you go over budget, it’s even more important to keep up with your tracking instead of just abandoning the whole thing. Going over budget also provides valuable information for when you build next month’s budget.
It’s important to re-allocate money when you’re under budget in a category, too! Some great places to re-allocate extra funds are:
- Debt. Throw extra money into your debts with the highest interest rates.
- Savings. It might be a better idea to prioritize savings over debt, especially if you have less than 3 months’ worth of expenses covered by your emergency savings.
- Giving. Having extra money left over after paying for necessities is a luxury that a lot of people don’t have, especially right now. Consider giving your extra money to a local organization working to help people who have been impacted financially by COVID-19.
You should now be a pro at tracking your spending! You can continue to use the tracking documents provided in previous months (planner inserts, printable trackers, Google sheets), or if you’re wanting to switch to an app, we recommend the EveryDollar app or You Need a Budget.
Personal budgets function as a roadmap for us, especially when we first start out. The point of this month’s challenge isn’t to strictly adhere to our budgets and give up if we don’t stick to our plan perfectly. The point is to learn to adjust our spending habits, be conscious of our budget when we make all kinds of financial decisions, from “Can I afford guacamole on my burrito?” to “How much can I realistically give to help my neighbors right now?”
For UF Employees: Financial Literacy & Retirement Education (FLARE)
For UF Health Employees: Retirement Information
For Florida residents: Free 1-on-1 financial counseling through IFAS