What is the last step in planning your budget?
The last step in planning your budget is: review and revisions.
Why are reviews and revisions the last step?
Because in this way you will get an overall picture of your income and expenses. Without it, you won’t know if your expenses are higher than your income, and you won’t be able to cut them in time and avoid financial issues. Reviewing your budget lets you see the categories in which you spend more than expected and adjust if necessary. Let’s take a concrete example: you review the budget for the next month, and while you take an overall picture, you see that you allocated for food half the budget for the previous month. Is this really doable? You might dive deeper into your previous month’s food spending and see that you ate a lot by going out. And this more than doubled the money you spent on food. Then, you might decide that the next month you won’t go out to eat. Instead, you will cook the food yourself. Then it might be reasonable to allocate half the budget for food in the following month.
What does reviewing actually mean?
Reviewing your budget means reviewing it from start to end with a critical mindset. In other words, you play the devil’s advocate and try to challenge each item. You might ask questions like this regarding each item on your budget plan:
- Is this really necessary?
- Is it a minor or major inconvenience if I drop this?
- Can I achieve the same result with a smaller financial investment?
You will know if you must change the plan by answering these questions. And now, let’s advance to the actual changes.
What do revisions actually mean?
Revising means making changes to the budgeting plan to improve it. This can be done in a lot of ways. Especially after you get some history tracking your income and spending. Revisions can be made based on your personal opinions. For example, you might see that you have subscriptions that overlap, like YouTube Premium and Spotify; you can easily cut one of them without major drawbacks. You might realize you paid for a subscription you don’t watch (which you did because it was on a major discount). In this way, you can improve everything based on your personal opinions. And after you improve everything you think could be improved, you can start looking at what other people do.
The most important activity to improve your budget planning is looking at how other people do budget planning. In other words, you compare yourself with people doing similar things. By doing this, you will find out if you overspend in some categories, and you will identify tips and tricks other people do to save more money. There are plenty of YouTubers who document their budgeting process, and you can learn a lot from them. Here are a few examples:
- The first example is from Carter Sulivan. and I chose her because she actually enjoys planning her budget and the paycheck breakdown. So, besides the concrete example, you will also get a bit of motivation, and maybe a bit of the excitement will also rub on you!
- The second example is from Natalie Barbu, who is 26 years old and living in Miami. I chose her video to have a more localized example so you can know about expenses in this area.
So, these are just two examples, but there are way more on YouTube. You could do more research and look at what other people who developed successful entrepreneurship business ideas do. However, they are not easily accessible to people who have just started budgeting because there is a particular way you have to search for them, which might not come naturally to most people. What you have to do is this: search for “budget with me” on YouTube, and you will get more than you can handle. Also, try to find people who live closer to your physical location (in the same country) so the things you buy have a similar cost.
Exploring Budgeting Apps: Truebill and Acorns
In the final stages of planning your budget, using budgeting apps can be a pivotal step. My Truebill budget app review reveals its pros and cons. It stands out as a good tool for tracking expenses and managing subscriptions. However, users should weigh its benefits against any limitations. Additionally, for those interested in easy investing, we delve into the world of robot investors with a review of Acorns. This app simplifies investing by rounding up your purchases and investing the spare change, making it an appealing choice for beginners in micro-investing.
Review and revise your budget as often as possible, and learn as much as possible from those already doing it!