You followed Steve’s advice for how to make a budget. Then you tracked your expenses in EEBA for a month. Or maybe even longer. Great job! So why does it feel like something’s not quite right?
Maybe you’ve noticed an Envelope that’s often in the red. You know which one I’m talking about… Or maybe you have an Envelope that always has extra green. No worries. Budgets are a bit like clothes. Sometimes they fit well — and sometimes they don’t. Most budgets need some tailoring before they fit just right. Here’s how you can tailor yours with EEBA.
Step 1. Look in the Mirror
Pull up the Expense vs Budget Report on the web and assess how you’re doing. Is there an Envelope that’s over budget (in red)? Or under budget by a lot (a short blue bar)? Pick just a couple to start. In my household, we were over in Utilities (at 155%!), and under in Household Items (at only 50%).
Step 2. Take Measurements
Get real numbers. With the Envelopes you picked in mind, go to the Expense Breakdown Report. Find out how much you actually spent last month — or your average across a few months. In our case, we averaged $213 per month for Utilities and $62 per month for Household Items.
Step 3. Tailor It
On Edit Budgets, compare your budget amounts with actual spending, then tailor your budget. This may mean simply reallocating money in your budget — or changing your spending. We bumped Utilities up and knocked Household down both by $63, which brought us closer to a realistic budget. As a last sanity check, make sure the total at the bottom still fits within your income — if not, adjust other Envelopes’ budgets or increase your income (side gig, anyone?).
|Envelope||Old Budget||Actual Expenses||Difference||New Budget|
|Utilities||$150||$213||$213 – $150 = + $63||$150 + $63 = $213|
|Household||$125||$62||$62 – $125 = – $63||$125 – $63 = $62|
Step 4. Make Alterations
Sometimes you’ll need to make a bigger change. This fall we flew out of town for family emergencies. With no good place for those expenses, we recorded them in our Celebrations Envelope leaving it deep in the red. Just to catch up to $0, we’d have to go 8 months without spending a dime! Instead, we made a new Envelope for Family Emergencies. Stuff happens — we don’t know when, but it will — so we’re saving up to be there for our families when they need us. Need to add an Envelope too? Do it on Edit Budgets.
Step 5. Start Fresh
In order to see how well your revised budget fits, start fresh. Make Envelope Transfers from extra-full Envelopes to those that are short. If you have a Scheduled Income or Distribution, check to make sure changes to your budget are reflected there too.
Now you’re all set to keep using your updated budget! If something’s a bit off, make a few more tweaks next month. Our finances change over time (just like our bodies), so feel free to keep tweaking your budget so it can fit just right!