Let’s face it: reviewing your budget isn’t something that you look forward to. In fact, if you’re like most people, you avoid this at all costs. That’s especially true if you’re confident that your budget is accurate and in good standing.
Even though it may not be your idea of financial fun, there are times when you should review your budget. Consider the following:
The Passage of Time
This alone is reason enough to review your budget. For example, if you haven’t taken a closer look since last year, you’re well overdue. Get into the habit of reviewing your budget every quarter, every six months, or at least once a year.
If you want to be cautious, review your budget at the end of every month. This will keep you in touch with the finer details.
A Change in Your Income
It doesn’t matter if your income goes up or down, it’ll impact your budget, how you save, and how much you spend.
So, once you realize that your income has changed, don’t hesitate to review your budget and make the necessary updates. This can be a tough pill to swallow if your income has taken a hit, but your budget must remain accurate.
A Change in Your Expenses
Just as your income has the potential to change, the same holds true of your expenses.
Did you buy a new car? Did you move into a new home? Did you bring a child into your family? Are you spending more money on gas or groceries?
You get the point. Your expenses can and probably will change over time. And when that happens, you should alter your budget accordingly. If you don’t, there’s a good chance that your numbers won’t make sense at the end of the month.
A Major Life Change
This can take on many forms. For example, if you get married or divorce your spouse it’ll impact your budget and financial circumstances as a whole. The same holds true if you move to a new city or state, change jobs, or have a child.
If you see a major life change coming, such as moving to the other side of the country for a new job, consider the impact it’ll have on your budget. This allows you to plan in advance to prevent complications.
There’s no right or wrong answer to the question of how often you should review your budget. Do what’s best for you, your approach, and your financial circumstances.
When you know that your budget is organized and accurate, you’ll feel much better about your ability to keep your finances in a good place.