Reviewing your budget doesn’t need to be a complete overhaul. Instead, it can be a useful exercise to check in on any progress you’ve made on your financial goals – and help you stay on track. Or, if you're in retirement, simply a way to make sure your expenses are in line with what you'd planned for.
If you’re not sure where to start, we’ve outlined four approaches you can take to make sure your budget is working for you.
1. Review your goals
Your goals and personal circumstances can change. As part of your budget review, go back and look at those goals you set yourself at the start. Are they still the main aim? Or has something else become a priority? Are you spending within your means each month, or can you reallocate some of your outgoings?
A budget review isn't about setting a whole new set of goals. Instead try to focus on fine-tuning and adjusting the ones you’ve already set for yourself. Dividing your goals into short, medium and long-term priorities can help you identify what to work towards and when.
Remember, sometimes setting too many goals can be overwhelming and hinder your progress – a budget is there to help provide direction and priortisation of your goals is key.
2. Check your progress
It can be easy to set a budget and then not pay much attention to it. For example, you might track how you’re doing each month, but not step back and look at the big picture.
If you’ve set yourself a goal for the end of the year, are you 50% of the way there? It could be trying to pay down a portion of debt, or set money aside for a dream holiday. Whichever it is, if you’re not on target to meet this goal say, mid-way through the year, consider re-evaluating your approach.
Analysing your progress on set targets can help you make adjustments, if required. It could be that you had some unexpected expenses at the start of the year, so you need to commit more towards building your balance back up. Or maybe you’re ahead of your target and can now afford to be a bit more flexible in the second half of the year.
While reviewing your progress, don’t worry if you’re not quite meeting your goals just yet. Working towards goals takes time, determination and sometimes a great deal of effort – trying to work towards something whether big or small is a positive step forward. If you do achieve a goal or multiple goals, remember to try celebrate your small wins too. Feeling good about your progress will only give you more inspiration to spur you on in your financial journey.
3. Embrace technology
We’re fortunate to live in a time where technology can lend a helping hand to simplify money management. If you want to free up some of your time by automating budgeting, there are plenty of apps out there that do just that. Apps like Money Dashboard are free to use and can help you track and categorise your everyday spending.
4. Find inspiration
If you’re feeling a little off track or have lost some of your motivation (let’s face it, it can happen to all of us now and again), then try exploring the world of money-based podcasts. While you’re going for a walk or doing the washing up, you could also be learning about healthy financial habits.
Podcasts like The Money to the Masses Podcast and The Financial Wellbeing Podcast feature information on all areas of personal finance. They can help you take stock of your own money, and maybe even inform some of your future budgeting choices.
Do you need more help?
So, there you have it, a budget review might sound overly formal but in reality it just involves analysing what’s going well, or not so well. From there you can change course and make adjustments, if needed. It really can help keep your personal finances on track.
Remember, financial advisers are highly qualified professionals who can help coach you towards achieving your financial goals and keep you accountable. If you don’t already have a financial adviser, you can find one near you by visiting MoneyHelper. But, please be aware there might be a charge for getting financial advice.