We’ve all been there: you spent too much on your vacation, went over budget on a home improvement project, and had to drain your emergency fund to pay for auto repairs – all in the same month. The solution to getting your finances back to where you want them to be? Going on a financial diet.
Here are some tips for getting your finances on track if you’ve been spending more than you’d planned this summer.
Rebuild Your Emergency Fund
Just about any financial expert will stress the importance of building an emergency fund, sometimes even before you tackle any debt. If your financial diet involves rebuilding this cushion, consider making that your priority. While keeping three to six months of living expenses has been the standard for a strong emergency fund, some financial planners recommend keeping a year’s worth of income, according to CNN Money.
Track Your Spending
Knowing exactly where you spend your money is an important part of going on a financial diet. Think of it as financial calorie-counting. Forbes suggests using budgeting software to monitor and track your expenses, if you aren’t already. Bankrate recommends eMoney, a financial management program built specifically for high-income, high-net-worth individuals.
Do A Weekly Review
Incrementally monitoring your success will keep you on task and help you know exactly when you’ll meet your financial goals. If you decide to use budgeting software, Forbes recommends checking it at least once a week.
Automate Whatever You Can
Whether you’re rebuilding your emergency fund or paying down an expensive medical or auto repair bill, Bankrate recommends having that money transferred automatically. Doing so can help you stay organized and help you reach your goals. Most banks, including Ally Bank, allow you to set up electronic payments and transfers on a one-time or recurring basis. Setting it up only takes a few minutes, and can make budgeting that much easier.
Did you spend more than you’d have liked to this summer? How do plan on getting back on track?