We’ve always believed that it’s a great thing to create a budget. However, we can’t stress enough that just creating a budget isn’t enough. You must also keep your budget up to date, analyze and continue to look for areas to improve it.
Image by Joost J. Bakker IJmuiden via Flickr
We found the article below from a fellow blogger who talks about why this is important to him. Here is what he had to say:
Sometimes, no matter how frugal we are, we still need to adjust our budgets to cope with outside economic forces which are beyond our control, such as climbing prices. We either need to earn more money, which I’m already doing, or cut costs, which is what we will need to do. Last year, I had predicted the economy may start to recover around September or October of this year. There are some early signs that it may be doing just that, but the recovery is going to be very slow, which I also predicted.
Even is you took steps before the recession to try and weather the storm (which we did), it’s always a good idea to reassess your finances every couple of months, and identify areas of spending which can be cut eliminated altogether.
The lesson: no budget should be carved in stone. You must be able to react to market forces (what other people are doing that affects your bottom line) and adjust your budget accordingly….
Read more of this article at I Got a Raise, so Why is the Economy Still Affecting Me?
As you can see, this individual was able to increase his income significantly, something that most people don’t have control over, and his family budget still worsened because of rising costs that they had not planned for.
The takeaway here is that everyone’s budget and finances are continually at risk. Besides working continuously on your budget, you should ensure that your budget results in a net monthly savings rate that can sustain you and your family during any time of crisis or other emergency funding that is needed. For besides death and taxes, large one-time costs are the other things that should be “guaranteed”.