Why You Should Refresh Your Budget Every 6 Months

June 15, 2015

Connect Member

Founder of The Holistic Wallet: setting financial foundations you can stand up and shout from!

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Budgeting has always carried with it the bad reputation of sucking the fun out of life. We  budget to set limits on spending and to steer income and expenses into specific categories, in hopes of paying down debt and saving for financial goals. Unfortunately, none of that sounds particularly interesting.

While financial wellness may be liberating, the process of tracking spending and monitoring a budget doesn’t feel so freeing. Many of my clients set out to budget and map out a financial plan only because they think it’s the right thing to do — and it is. A budget is the itinerary to get you from where you are to where you want to be.

The good news is that although the process of budgeting is something we need to maintain throughout our lives, the act of budgeting itself has a much shorter lifespan. Part of the reason I see clients fall out of the budgeting habit is because their budgets get stale. A sustainable budget is one that is engaging, can absorb shock, and will change over time.

Imagine doing the same routine every single day for the rest of your life. A budget is like a financial diet (and we all know how effective diets are!). If you were going on a diet and had to eat the same seven pre-cooked dinners each week and perform the same exercise regimen each morning, how long do you think you’d keep it up?

In our day and age of finance apps and automation, it’s easy to think that mindless routine is the right way to a secure financial future. However, budgeting shouldn’t be some background operation you set and then forget. The best way to stay on track with your budget is to consciously interact with it. If you can balance your budget in your sleep, you might be missing something that’s not in your best financial interest.

Six months is the perfect time frame to check in and switch things up a bit. It’s a time period that is long enough to measure your plan’s past performance, yet short enough to still change course if needed.

Whether you’ve been following the same budget for a few years or that financial New Year’s resolution has gotten a little dusty, here’s why keeping your budget fresh is a great way to ensure that your journey toward fiscal health is sustainable and enjoyable.

Your goals or lifestyle may have changed.
People change, circumstances change, and habits change. Give yourself permission to change course if your budget no longer matches your goals. Even if you committed a lot of time and effort, it’s better to change course after six months than to have to do it six years later.

If it’s broken, you must fix it.
Acknowledge what’s working and what isn’t. Maybe you have more money than you need in one category over another. If you keep spending outside of your grocery budget but don’t need as much in your personal care category, balance that out. When you check in to refresh your budget, you’ll be forced to confront your progress sooner than later.

Change is exciting.
Even if it’s not broken, spice things up a bit. We rearrange furniture, change jobs, and alter our hairstyles. Why not have the same fun with your budget? Challenge yourself to cut back on dining out and cook an extra meal per week, or to ride your bike on small errands and put the unused gas money toward a massage. If you don’t like the changes, you can always switch back in six months.

What’s important to remember is if your budget didn’t last six months, you need to come up with a new one. And if it is working, try something slightly different to keep it exciting. After all, a sustainable budget is one that is both flexible and true to your personal aspirations. As long as you keep refreshing your budget twice a year, you’re bound to stay on track and reach your financial goals.

Michelle Bobrow is a member of the DailyWorth Connect program. Read more about the program here.

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