Unless you have built up a considerable emergency fund, going over your budget can be an incredibly stressful experience. After all, despite the wide availability of credit and lending options, money is still a finite resource and you wouldn’t want to borrow from some lenders due to shady practices and hidden, high-interest fees anyway.
How to Recover After Going Over Budget
If you’re anticipating going over budget in the near future or you’ve already blown your budget and you’re trying to recover your financial stability, here are some steps to take to gain some peace of mind:
Don’t Drag Yourself Down
First things first: getting angry with yourself or your partner or your circumstances won’t help anything. Remaining calm and being able to clearly discuss your financial reality are essential when you’ve been dealt the first blow of an underestimated budget. Rather than dragging yourself and/or your family down with stress-driven reactions, you should immediately focus on the objective components of the situation, including:
- Missing your target budget doesn’t make you a bad person or a financial failure.
- This is only temporary (remind yourself of this consistently).
- You will overcome this and prepare better in the future for potential circumstances similar to your current one.
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Proactively Evaluate What Happened
Once you’ve centered yourself, you’ll be better able to engage proactively with the situation. This entails an honest evaluation of what happened by asking yourself what caused you to go over budget, was this preventable (if so, how?), and what you could feasibly do to avoid such a problem in the future.
Rather than frantically scrambling to recover your budget right away (which may only produce short-term results), it’s important to understand how you can create long-lasting change by identifying exactly what expense or circumstance led your budget to fall apart at the moment.
Find Short-Term Cuts
Emphasizing long-term, proactive evaluations does not mean you shouldn’t simultaneously look for quick fixes in the meantime, either. As long as you understand that’s just what they are – quick, not permanent or 100% effective solutions – then locating short-term cuts in your budget could reduce your stress by producing some measure of results (e.g., monetary savings) and reduce the impact of a blown budget on your overall financial situation.
As you probably already realize, even little expenses add up over time. Whether this is your ongoing film/television subscriptions (which can be canceled temporarily with no cancellation fees or re-start fees), eating out at restaurants, or waiting a little longer to replace some non-necessary items like clothing, electronics, and furniture, there are many different ways to save on small areas of your budget.
All it takes is an hour or two of you sitting down and going through the list of expenses in your budget and evaluating. You should look at which ones are your most crucial categories and which ones could be reasonably reduced without impacting your life to a great extent.
Who knows? You might find yourself permanently reducing your budget, thereby freeing up more money each month to put into a rainy day fund instead.
Get a Temporary Side Income
Budgeting entails more than just making cuts here and there. Bringing your budget back into balance after being thrown off course by an unexpected expense or financial mistake may also involve increasing your income to align with higher expenses and/or debt loads. Since you likely don’t have the time or energy to take on a second job, here are some ways to make money on the side that allows for greater schedule flexibility and potentially even passive income opportunities:
- Drive for Lyft or Uber
- Sell crafts on Etsy or unwanted, moderate-value items on eBay
- Offer a service on Fiverr
- Open your unused office or bedroom up to Airbnb travelers
- Build a passive income with investing
Blowing your budget isn’t the end of the world. You won’t be in the red forever, you aren’t a failure because you happened to go over budget, and you will overcome this temporary period of stress and financial struggling. You won’t resolve the problem overnight, but a focus on both short and long-term solutions can help you prevent this from happening again later on down the road.
Rather than trying out a bunch of quick fixes with no consideration for future financial strategizing, develop a new budgeting system that works for your situation, whether it entails more side income or more cuts to your current budget. Being proactive, rather than reactive, will ultimately produce the best results and help you avoid financial problems the next time you come close to blowing your budget.