Nothing beats a good, old-fashioned fresh start. It’s good for the soul to wipe the slate clean and get one big redo. That’s why people love the beginning of a new year, going into a new grade, getting a new job, or moving to a new place. But when was the last time your budget got a fresh start of its own?
Now—yes, like right now—is the perfect time to check in and see if your budget needs some extra attention. Check out these 13 signs that it’s time to refresh your budget. And if you can relate to any of them, it’s time for a change.
13 Signs You Need to Refresh Your Budget
1. You’re constantly worrying about money emergencies.
Life happens. Worrying about it doesn’t help, but prepping for it does. If you don’t have an emergency fund, create space in your budget to save up and make it happen—stat. You’ll do this in what we call the 7 Baby Steps.
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Baby Step 1 is saving $1,000 for what a starter emergency fund. Baby Step 2 is crushing all debt (except the house—that comes later). And Baby Step 3 is stashing away three to six months of expenses into a fully funded emergency fund.
When you’ve got an emergency fund under your belt, you’ll rest easy at night knowing you can handle it if (and when) an emergency pops up. You won’t worry over the next crazy “life happens” moment. You’ll live in confidence with peace of mind, all thanks to that emergency fund.
2. You use the same exact budget each month.
One of the best ways to stay on top of your money game is to budget before the month begins—every month. That means you can’t use the same budget month after month like an old, comfy T-shirt.
Don’t freak out: You don’t have to start from scratch each time. You can copy the current month’s budget to the next and then just tweak it where you need to. Or, if you’re using our free budgeting app, EveryDollar, last month’s budget automatically gets copied over for you. Then you can tweak and update to your heart’s content. Think about any month-specific spending coming up (like your brother’s birthday or tickets to that music festival) and move money around to make things work.
Refresh your budget and keep it up to date by scheduling a monthly budget meeting with your accountability partner. If you’re married, that’s your spouse. If you’re not, grab a trustworthy friend or family member and ask them to keep you on track. Check out our budget meeting checklist to get some inspiration for these meetings!
3. You aren’t tracking purchases.
Your budget does you no good if you set it and forget it. Your goals aren’t a slow cooker, and your budget isn’t either. You can’t dump in numbers, click a button, and walk away. You’ve got to take a look at it—a lot.
And you do that by tracking your transactions. Every time you make a purchase, you need to log it in the budget. Budgeting is how you plan, and tracking is how you keep up with the plan. If you aren’t tracking your transactions on the regular (or you’re letting them sit there for way too long), now’s the time to start.
4. You don’t have a budget line for giving.
Make giving a priority—always. Tithing to your church, donating to charities, or supporting worthy causes are important parts of living a fulfilled life. We recommend giving 10% of your income—even if you’re in debt. Refresh your budget and make a giving line item each month. That way it won’t be an afterthought and you can’t make excuses for forgetting about it.
Now, it may sound crazy, but being a blessing to others is the only way to truly live like no one else. Generosity shifts the focus off of us and away from our problems and our dumb financial moves. It frees us up to think about more than ourselves and appreciate what we do have. Contentment doesn’t come when we have enough—it comes when we see that what we have is enough.
5. You overspend in one category. A lot.
If you’re overspending in one part of your budget all the time (food, we’re looking at you), something’s got to give. That means it’s definitely time to refresh your budget ASAP to keep you from overspending anymore. Here are two ways to look at it:
First things first, maybe you just aren’t being realistic here. You probably can’t set your grocery budget at $300 a month if you’ve got four growing kids. So, adjust that to a number that makes sense for your life—one that keeps you on track with your money goals but also fits your family’s lifestyle.
The second reason might not be as easy to swallow. But we think you can handle it. Ready? Maybe you should have a heart-to-heart with the person staring back at you in the mirror. Gulp.
If you always budget $20 a month for fancy coffees but you end up spending $100, it’s time to wake up and smell the at-home coffee maker—things need to change. And nope, you don’t need to up the budget line here. This calls for a different kind of action—it’s time to rein in that spending. You’ll never make progress on your dreams if you’re literally chucking them away one sip at a time.
6. You got a raise.
There’s nothing like making more dough—so congrats! But if you just saw that bump in your paycheck, now’s the time to make sure that every single one of those new dollars has a job to do. Now that you’ve got more cash to your name, put it to work so you can reach your goals like getting out of debt or investing. And whatever you do, don’t fall for lifestyle inflation. That’s when you start making more money and then “inflate” your lifestyle to match it. You can kiss that raise goodbye if you do that. So don’t.
7. You lost your job.
The flip side of getting a raise is the reality of job loss. If you flat out lose your job (or even just have a dip in income), you need to adjust your budget based on the new amount of money you have coming in. And you’re about to go into survival mode too. Here’s how to make it through:
You’re going to take care of your Four Walls first—that’s food, utilities, shelter and transportation—and in that order. The goal here is to cover your biggest needs so you can make it to fight another day (and find new work soon!). If you have any money left in the budget after you take care of your Falls Walls, then make a list of what you need to pay next in order of what’s most important.
8. You haven’t updated your budget since the pandemic.
Let’s be honest—during the height of the pandemic, you probably saved some money by not eating at restaurants, going to concerts, hanging with your friends every weekend, and commuting to work. Fifty-eight percent of people said they swapped their going out money in their budget for staying in instead.1
But now that things have opened up, your wallet probably did too. That means you need to refresh your budget to reflect how things are now—like you probably don’t need that sinking fund for toilet paper anymore.
9. You forget annual expenses.
Funny enough, it turns out Christmas happens at the same time every year. (It’s December 25, don’t forget!) And that semiannual car insurance payment? Well, you know that’s coming down the pike sometime. Don’t forget about your subscriptions that renew too! Those things will really sneak up on you if you’re not careful.
If you’re not budgeting ahead for expenses you know are coming up, it’s time to start. Otherwise you’ll be tempted to jump into debt (no thanks!) or use your emergency fund for something that’s not even an emergency.
Don’t worry, there’s a pretty simple way to remedy this. Jot down a list of all your annual and semiannual expenses and their due dates. Then make a sinking fund for each expense, and start stashing away that cash long before the due date comes knocking at the door.
Never heard of a sinking fund before? It’s a simple way to save up cash for a bigger expense, almost like a piggy bank inside your budget. For example, you can set up a sinking fund for Rover the dog’s annual vet visit. Just divide the total cost by twelve, put that much in the fund each month, and you’ll be 100% ready to pay that bill in cash.
10. You need space for a new budget line item.
If a new expense comes into your life, it needs a spot in the budget. But that doesn’t mean you magically get more income to balance it out. (Too bad, right?) So you have to have a different plan of action.
Let’s say your kid starts tuba lessons or you sign up for a TV streaming service. Now you’ve got new monthly expenses you need to make room for in the budget. Look for nonessential things in the budget that you can adjust. Your monthly mortgage is probably set in stone and not going anywhere, but what about your restaurant spending or entertainment?
Just making small tweaks to budget categories can really make a huge difference in freeing up extra cash and refreshing your budget. Get yourself back to that zero-based budget magic, and you’ll be good to go.
11. You aren’t budgeting to zero.
Speaking of zero-based—is that how you’re budgeting? No? Well, you should. Zero-based budgeting works like this: When you add in every source of income and then subtract every single expense, your budget should end up at zero. Budgeting like this gives every dollar a job, and it’s how we at Ramsey teach budgeting. Because you work hard for your money, your money should work hard for you. Every. Single. Dollar.
12. You just hit a Baby Step milestone.
When you pay off a debt (no matter how small) or finish a Baby Step completely, first of all—celebrate! Throw some confetti and be proud of yourself. Any Baby Step milestone is a big deal.
Then, after you vacuum up the confetti mess, refresh your budget and get it prepped for the next goal. If you just wiped out a debt, that means you’ve cleared more cash to add to your snowball. Now you can pay even more on the next-smallest debt on your list! Or maybe you just wrapped your fully funded emergency fund and are ready to tackle investing. Don’t forget to budget for that 401(k) contribution.
13. Your budget doesn’t line up with your money goals.
You’ve got big goals. And that’s awesome! But you can’t get from where you are now to where you want to be if your spending habits don’t line up with your money goals. Sorry, Charlie.
Take a look at your spending and your money goals. Do things line up? If things look off, then it’s time to refresh your budget. Maybe it’s time you scale back in some places or drop a few expenses you don’t really need. Listen—to make those dreams and goals a reality, you’ve got to dig in and do the hard work now. Stick with it. It’s worth it, we promise!
You Need to Refresh Your Budget by Season
We hit on this a little with the semiannual expenses talk, but remember to refresh your budget a based on the seasons of your life. This is going to look different for everybody, but here are a couple of common seasons when your budget might need a revamp.
There’s nothing like the dawn of a new year to make you sit back and take a hard look at what needs to change in your life. And setting the right kind of goals is the best way to do that. Fitness goals, career goals and—oh yeah—money goals. This is the time of year to take a good, hard look at where you want to be this time next year. What are the goals you’re trying to hit? And what changes can you make in your budget to get there?
Summertime is famous for bringing a spirit of freedom with it. Maybe it’s because of Independence Day. Maybe it’s because the kids are out of school. Or maybe it’s just because we all want a vacation from real life. But whatever it is, summer has a way of making us want to run through the sprinklers and toss our budget up in the air. Everyone wants to live without a care in the summertime, but if you’re not careful, it’s easy to ignore the budget. But if you stick with it, you’ll be able to score some summertime savings and keep your goals trucking along.
Back to School
Sure, summertime is notorious for derailing your budget like none other. But once back-to-school time kicks in, it’s like a second new year—you get a fresh start midyear (just in time to begin saving for Christmas!). Once summer is in your rearview mirror and the kids get back to a routine, people start to get back on track and make friends with their budget again.
Use all of that back-to-school energy to get your budget back on track. Now’s the time to buckle down and recommit to the money goals you started at the beginning of the year.
Holidays and Birthdays
Did you suddenly remember that Christmas is coming? Is Mother’s Day right around the corner? Maybe all your nieces and nephews have birthdays that all fall in the same three-month span of time—and you just realized it. Whoops. Whatever it is, looming holidays are a good time to refresh your budget again.
That’s a whole lot easier when you use our free budgeting tool, EveryDollar, by the way. You can make tweaks and track transactions on the go while using the app. And if you want to unlock all of EveryDollar’s premium features, sign up for a free trial of Ramsey+. Take it for a spin and see all the bonuses it has to offer—like getting insights to your monthly spending habits and linking it straight to your bank account.
So, whenever your budget’s ready for a fresh start, don’t be afraid to jump in and make the changes you need to. Your budget should be about you—your life now and your money goals for the future. Go get it!