Your budget can change quickly.
You can plan everything out but sometimes expenses come up and things can change. Or maybe you don’t spend as much as you were planning and have extra money you might be able to save or use to pay down debt.
As proactive as you should be with your initial budgeting process, you should never discount how well a 5-minute budget check in can keep you on your financial track.
Not only will it help you stay on track during the month, but ultimately it helps you stay proactive with your financial future. It shouldn’t replace your monthly budgeting process, but it helps you know where you are throughout the month.
Outside of using an Excel-based budget template (bonus: here are 35+ budget worksheet options I’ve checked out that you can potentially use), this check-in is something that my wife and I have used for years to help us stay on track and know where we stand.
Do we have our planned amount of money for our date night later in the week? What about the money one of us planned for an activity out of the house?
5 minutes a week and we know if we’re still on track or not.
How can you possibly take only 5 minutes (or less!) to check on your budget to see how you’re doing? It’s actually quite easy.
And it really just comes down to making sure you are as familiar as possible with your monthly expenses.
There is no need to look at how much you have spent in each category in the previous weeks of the month. This check-in is supposed to be forward looking and if you start analyzing your past spending, the task will take much longer.
So how do you keep this at 5-minutes?
4 Steps To The 5 Minute Budget Check In
#1. Determine How Much Money You Have Available
This is as simple as looking in your checking account and/or seeing how much cash you have.
#2. List Out Upcoming Bills (Phone, Mortgage/Rent, Water) & Expenses (Food, Gas, Events)
What do you have coming up before the end of the month? How much and when? This is the longest part of your 5-minute budget check-in.
The better you understand your upcoming expenses, how much a gas fill-up costs, and what your pantry is looking like (and therefore how big your next grocery trip will be!), the easier this process will be.
#3. How Much Are You Over-Allocated or How Much Do You Have Left?
Using the money you have left compared against your upcoming expenses, see if you have extra money or not enough to finish out the month. To see if your budget is on track in general, compare your new leftover number to what you had projected at the beginning of the month.
#4. Adjust Projected Spending & Savings Based On What You Have Available
If you suddenly realize you have an extra $100, you can plan to put that extra in savings or towards a retirement account.
Or if you found that your leftover money is $100 beneath what you projected at the beginning of the month, then you need to look at the opportunities to cut expenses.
The first category I would recommend looking at would be entertainment and food. Both can get expensive but both have options that are either inexpensive or free to take advantage of.
I can’t tell you how often my wife and I have made our budget at the beginning of the month and then a week later realized that some of our expenses came up sooner. Or perhaps we spent more on groceries because a great bulk-deal came up that we wanted to take advantage of.
Not all adjustments have to be made because of bad spending habits.
And on a weekly basis, sure, some of those minor adjustments may not move the needle that much. But this way, if you start over-or under-pacing your budget, you’ll know sooner rather than later and can always adjust discretionary expenses on the fly.
Spend too much on food one week that puts you on pace to spend $50 more than you thought during the month? Well now you know and can adjust how much you should be spending for the rest of the month.
Have extra? Instead of spending it you can plan to put it in savings.
Perhaps a doctor’s appointment or home improvement expenses were $100 less than what you planned for. Well, the weekly check-in can let you know where you’re at so you can potentially put that money towards debt or your savings.
For us, that was an important distinction to make once we had been doing this for a while.
The 5 minute budget check in shouldn’t only be used to see where you’re spending too much money.
Not only can they help you get ahead of the game in your monthly budget, but they should also help you get ahead with your overall financial future.
The Benefits Extend Much Further Than 5 Minutes
One of the main reasons we’ve found the 5 minute budget check in to be helpful is that it defines a time for us to communicate about finances. In general, we have a good, unspoken method of making sure we’re on the same track about money, but these weekly check-ins definitely help too.
Money is one of the top causes of fights between couples, but making sure communication is a big part of your financial life is a great step toward making sure you both are on the same page.
Having this check-in is a great way to create some structure in your discussions if you’ve struggled to find ways before.
Neither of you will be at risk of spending or saving money that you may not have.
You both always know where you stand because budgets, expenses and available money change regularly.
That’s why a weekly check is great.
You shouldn’t go a full month without knowing where your finances are netting out versus what you planned.
After all, being proactive helps you get ahead with your budget and its one of the best steps to gain control of your finances.
Author Bio: Nate from http://hackingyourbudget.com is a 24-year-old digital marketer by day & personal finance blogger by evening, sharing his and his wife’s journey to paying off $38k in student loan debt. You can find Nate on his site or on Twitter @hackyourbudget.