How to Get Back on Track After Blowing the Budget

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We all have budget blowouts every now and then. Here are eight steps we take to get back on track after we’ve blown the budget.

Piggy bank with sticking plasters on grey stone table.

We’ve stepped outside our usual routine over the last few weeks.

Family visited unexpectedly. There were school excursions for the kids. A leaky shower that was more than our emergency fund. Not to mention a few books that I really shouldn’t have bought…

And it’s resulted in a budget blowout that we now have to fix.

Before getting into how we deal with budget blowouts, it’s important to note that a blowout is different from budget strain, which is what many of us are feeling at the moment.

A blowout is when you’ve overspent temporarily according to your predetermined budget. It’s something you can recover from by tightening the purse strings temporarily.

Budget strain is when the budget can no longer cover expenses or rising costs. A budget blowout on top of budget strain can make matters even worse.

This post is about getting on track after a temporary budget blowout.

Disclaimer: This information is general in nature and does not constitute financial advice. For personalised advice, please see a professional. The National Debt Helpline is a free service that offers financial counselling. 

Steps We’re Taking to Get the Budget Back on Track

When we blow our budget (and it happens from time to time), these are the steps we take to get back on track.

1. We Don’t Beat Ourselves (or Each Other) Up

Realising we’ve overspent can be a source of stress and tension, especially when there are back-to-back unexpected expenses.

However, beating ourselves up doesn’t get us out of the situation (in fact, feeling bad about it can make me want to bury my head under the pillow and ignore the problem). Also, getting angry at each other just makes matters worse.

While sometimes it’s easier said than done, accepting the situation and working out how to move forward is more productive.

2. Assess the Damage Head On

It’s tempting to ignore overspending (see head-under-pillow comment above).

I’ll, er, think about that tomorrow. Or, um, maybe next week.

I’ve done it plenty of times when I just don’t want to think about the problem. But kicking the can down the road just makes things worse.

The sooner we get a handle on the situation, the sooner we can work towards recovery.

So after a budget blow-out, we don’t ignore the numbers (for too long, anyway); we sit down, open up our online banking, open up our budget, and crunch like a Hemsworth brother (the numbers, that is), no matter how painful. 

3. Making a Budget Plan

Now we know the damage, it’s time to make a plan to fix it.

That might mean snowballing our debt or creating a plan to rebuild our savings using the savings tricks below. 

We’ve been using a payday plan budget for years now to balance our budget. It helps us smooth bills, work out if there is any surplus after we pay expenses, and if so, how much.

Once we know how much we can pay each payday towards our budget blowout, we divide how much we owe by how much we can pay. That gives us a target date, so we know how long it will take us to get back to where we were.

As a simple example, just say we owe $1,000 on the credit card, and we work out we can pay $100 a fortnight towards it. That’s 11 fortnights (one extra to cover interest) to get back on track.

If we had no spare cash, we would have to look for places to cut back expenses and redirect funds to the debt.

An action plan, especially one we automate, means we’re not leaving our recovery up to a wing and a prayer.

4. Cutting Back Expenses in the Short Term to Get Back on Track

We definitely have areas where we can cut back on.

Years ago, when I thought I couldn’t cut our budget any further, I found we could. Today we have more wiggle room, which means more areas we can cut back on.

Anything that isn’t a necessity will be paused until we get back on track.

5. Finding Ways to Make Extra Cash

We also can speed up our recovery by making extra cash.

While our work doesn’t offer overtime, with growing kids, decluttering is a constant chore, and we can always find something to sell for extra cash.

Putting extra cash towards our blowout recovery plan helps us get back on track faster.

6. Identify the Cause of the Budget Blowout

We all have our weaknesses; books are mine. And while a few extra Kindle books weren’t the main cause of our budget blowout, they are a constant temptation.

Identifying the cause of budget blowouts helps us avoid them in the future by knowing our spending triggers and steering clear of temptation.

I was lucky in that Google fixed my problem for me. 

They stopped Amazon from being about to sell eBooks through their app. That little bit of friction (having to save the book to a wishlist and then find it again on the browser) is enough to stop me from buying books thoughtlessly.

But if Google hadn’t stepped in, I would have had to take steps to limit the temptation, like getting rid of the app or disabling my card and going back to browsing the library catalogue for fun (don’t judge).

Identifying the cause of the blowout enables us not to make the same mistake again.

7. Adjusting Our Long-Term Budget Plan 

Budgets work best if they include a ‘splurges, spontaneity, and fun’ fund. There have been times when that fun fund has only been a couple of dollars a week, but those few dollars make all the difference.

We have a ‘fun money allowance’ for regular small splurges and a ‘school holidays’ fund as part of our savings plan, and I put a few dollars towards both most paydays if I can.

It’s more enjoyable spending money if it’s allocated and guilt-free. Sometimes, it’s only enough to go out for a milkshake in the holidays. But that makes it all the more special.

Having a working budget and a fun money fund allows you to let go and not worry about whether you should be saving this money for something else.

8. Getting Help if Needed

A little bit of overspending now and then is easy to bounce back from if you’ve got a resilient budget in place. 

But when the SHTF, getting back on top can be hard. Real hard. 

And when it gets hard, it’s ok to get help. We all need help sometimes, even those of us who are fiercely independent. 

Financial counsellors, Centrelink, charities, food banks, and family can help us get through hard patches and get back on our feet. And if we feel we need to, we can always volunteer, donate, or pay it forward later on.

We’ve blown the budget plenty of times over the years. As we’ve gotten older, we’ve become better at recovering. Sometimes we blow the budget through frivolity, sometimes, stuff happens that’s out of our control. Having a strategy for the fallout makes it easier to manage.

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2 Comments

  1. Oh this is quite timely for me… my slush fund has taken a hit over the last couple of weeks! :( Summer is crazy expensive for us and it’s showing! I’m hoping to build it back up and am just thankful that we have zero debt! Thats my saving grace!

    1. Melissa Goodwin says:

      Hi Clara, summer is like that – it’s Christmas in our summer, so you can imagine the spending :). It seems you do summer in the states in a big way??? That might be because we view the US through Pinterest tinted glasses through :).