Budget Sense

Your friends or relatives are visiting from out of  town, and you take them for dinner, movies and other fun places and by the end of the night, you have already blown your entire ‘personal and pleasure’ budget allocation for the entire week. To make matters worse,  it is only Saturday and you still have over a week till your next paycheck!

Life happens. As much as we preach about the importance of being disciplined and having complete control over your budget, you will inevitably go through circumstances that will force you to lose that control.  But this shouldn’t be the end of the world, nor should it make you give up on your budget altogether and forget about it. The fact that life can be unpredictable sometimes should be a reason for you to sit back and relax. Here are some effective methods on weathering such inevitable budget turbulence and storms, and bringing things under control again:

• Take a deep breath and acknowledge the obvious: It is not the end of the world. Using a ‘health and weight loss’ analogy, occasionally, you will hit these bumps and splurges. Nothing wrong with it, as long as you don’t go through them every week. Like we already said, life happens, and there is nothing wrong with that.
• Look at the big picture and adjust: how many days are there left in your current budget cycle? how much money will you need to borrow from your other budget categories? which category can afford to borrow from? if you go through these questions and take the time to answer them properly, you should be fine for the rest of the week, until the next paycheck.
• Skip or cancel any big spending events: are you planning to hit the mall in the next few days? thinking of making a big purchase? you should forget about these until at least your next paycheck, unless the purchase was already budgeted for or is not big enough.
• In extreme needs, use a credit card: although I don’t usually encourage the use of credit cards, I may be OK with it in extreme cases. And by extreme, I mean really extreme. A time where you really need to pay for something without a delay.   And be sure to pay it back right when you get your next paycheck, hopefully just a few days away. In this case, not much interest should accumulate, if any, since you are only a few days from your next paycheck.

At the end of the day, you should learn from it all.  At times like these, you will come to appreciate how budgeting helps organize your life.  While it may seem limiting, it is actually quiet liberating. If a budget didn’t exist, you could run into situations like these more often.  But even with a budget, you will run into these situations every now and then, but much less often. But it is OK, and you can easily bring things under control by following some of the points we outlined above.

Remember, if you don’t go through these tough stretches, you won’t learn much.