Alright budgeteers, you made it! You waded through the mother of all budgeting sessions, you set realistic but intensive goals, and you have probably achieved some and not achieved others. No matter how well or poorly you followed your projections from your last budgeting session, it is HIGHLY important that you follow up.
Cue… your Second Budgeting Session!
This session will be less time intensive, especially if you have been reporting and tallying daily or weekly with your partner (or with yourself).
This budgeting sessions will be split into two sections - the analysis and the refinement. Both are incredibly important.
Start your session by simply observing your expenses. Hopefully this is already practically done for you, if you have been checking in regularly with each other. If you fell off that bandwagon, no worries - go through your bank/credit card statement(s) and assign each purchase a (not unique) partition, and add up how much is in each partition by the time you are finished. Use your handy dandy spreadsheet to document your expectations versus your reality. (Pro tip - use a new copy of the handy dandy spreadsheet for each month’s budget. Even though you could theoretically recycle the same one, you will lose valuable data trends and you might drive yourself insane trying to keep track of which month you are in).
Once the information is in your spreadsheet, simply look at it and neutrally identify areas that you overspent and areas that you underspent. Do not play the blame game - you are on the same team, and you do not want resentment in your relationship!
This section will be spent bridging the gap between your expected spending and your actual spending. If your goals were a little too rigorous, adjust your expectations. If you could have met your goals but didn’t, make a plan on how you will meet those goals this month. (One of the best ways to plan to succeed is to plan to report). Also consider special circumstances in a month - major holidays, birthdays, anniversaries, vacations, seasonal income fluctuation, or simply having 5 weeks instead of 4 can affect how the budget partitions are distributed. Plan for these special occasions appropriately for your circumstances.
Your subsequent budgeting sessions will all include analysis and refinement, although you may choose to have an additional goal-setting section devoted to a specific topic (such as retirement, Savings, or Debt Payoff). In my experience, once-a-month budgeting sessions work well, although some people prefer every two weeks (to line up with paychecks). In any case, it is imperative that you continue to report on your expenses and revisit your budget frequently.
I spend most of my spare time playing with spreadsheets, my violin, or planting vegetables in my garden in hopes of bringing new insights into frugal living. Please enjoy, and don't forget to sign up for our monthly newsletter here.
Disclaimer - Mrs. FB is not a financial advisor. Nothing in these articles should be construed as investment or other professional advice, but rather personal opinion. Some links in these posts may be to affiliate sites - no products are advertised through this site that have not been personally used by the FB family unless expressly labeled.