No matter how financially inept a person is they always have some sort of budget to follow. Now, the problem doesn’t really lie in the budget itself, but it lies more on a person’s ability to follow through. However, just like promises to ourselves, budgeting plans are frequently broken.
Especially with the upcoming holiday seasons, blowing out your budget is as easy as tying your shoelaces. Why? Well, simply because we’ve come to accept a “fact,” that it’s that time of the year to overspend and binge shop, only to wake up the next day feeling bad about spending all that money! But don’t worry, it’s not impossible to recover from a budget blowout, and we’re here to help to with just that.
Assess the Situation Immediately
Don’t put the situation on hold. It’s better for you to immediately assess the situation, do some damage control, and find a way to resolve it. The sooner you get a handle on the damage, the sooner you’ll be able to recover and get your finances back on track. The best way to manage this is to come up with a recovery plan.
Manufacturing a Recovery Plan
So you’ve assessed the situation, and you now have a better picture of your financial status, after the blowout. Ask yourself questions like “How much extra can I put aside each payday to pay off my splurges? How long will it take to get back on track? Is there anything else that I can do to fast-track my recovery?” Then sit back, follow the plan and wait until the damage has passed. You might also need to consider a debt recovery plan with a professional and a plan to rebuild your savings.
Cut Back and Lessen Expenses (For Now)
One of the fastest and most efficient ways to recover from a budget blowout is to cut back. Depending on the amount of the blowout, you might want to cut back a bit on the coffee and ice cream. You might opt to have a “No-Spend,” month as well. But do keep in mind that it’s a temporary cut back, and once you’ve got your budget back on track, your expenses should go back to normal as well.
Acquire some Extra Cash
Not much needs to be said here but to get some extra money to cover for the blowout. Start working on a couple of sidelines, work overtime, or sell some of the stuff you no longer need.
Make a Long-Term Plan
Lastly, if you don’t want another blowout to happen, then you’re going to have to create a long-term spending plan. You can do this by dividing your finances and creating a type of money allowance that you spend only for fun. It’s in that division that you can have those small, regular splurges, without having to worry about ruining your budget.
It’s not wrong for you to enjoy the money you’ve earned through hard work. However, if you go overboard, you might end up with nothing or even worse, long-term debt that leaves you with significantly less money for years, long after the initial money was spent. Recovering from a budget blowout is a trying road, but it might just be what you need. The lessons you can get from it might just enhance your financial discipline in the long run.
As mentioned earlier, it’s best to assess the situation immediately, so get in touch with me now, and I’d be more than happy to help you avoid any future budget blowout! You can reach me via email @ amira@yourmoneyhabit.com.au or via phone +61 4479 31077.