Evaluate or Reviewing Your Budget

An important part of budgeting is evaluating or reviewing your budget to determine its success in accomplishing your financial goals.

Prioritize Your Budgeting Needs

Evaluating your budget consists of making sure your needs are prioritized correctly:

What payments should I make first if I don’t have enough money to pay for all my bills?

1. First, pay off your necessary household expenses, such as rent or mortgage, utilities, and food, first. You need to pay your rent or mortgage to ensure you don’t get evicted or have your property foreclosed upon. Think about the health and safety of your family when making these types of decisions.
2. Many utilities, such as the telephone company, electric company, and gas company, have programs to lower your bill if you qualify. If you think you need assistance, contact your utility company.

What should I do if I can pay off my monthly household expenses, but am having trouble paying off my loans?

1. Pay off the loan with the highest interest rate first to save on interest payments.
2. Talk to your creditor. Your creditor may be willing to reduce your payments or change the terms to accommodate your situation. Some creditors might offer extensions, smaller payments over a longer period of time. Some creditors might accept partial payments.
3. Get a debt consolidation loan. Be cautious of this option. If loan fees and interest rates are too high, it may not be the best option for you.
4. Get professional advice. Reputable credit counselors can help you deal with your financial problems. Some organizations charge little or nothing for their services.
5. Be cautious of companies that promise to fix your credit problems right away. Credit repair can be a long process that might take several years.

Decrease Your Spending

After evaluating your budget, you may find that you need to take more steps to meet your financial goals, such as decreasing your spending and/or finding ways to increase your income.

Here are some helpful tips for decreasing your spending:

1. Carry only small amounts of cash in your wallet so you won’t spend it.
2. Use direct deposit. You will be less likely to spend money if it goes straight into your account.
3. Control your use of credit cards.
4. Don’t go shopping just for fun.
5. Take your written savings goals with you as a reminder.
6. Buy only what you need—don’t buy things just because they are on sale.
7. Use coupons to save money.
8. Use a grocery-shopping list to prevent impulse-buying.
9. Take your lunch to work instead of eating out.
10. Shop around to get the best deal for big-ticket items, like cars and appliances.
11. Pay your bills on time to avoid late fees, extra finance charges, utilities being turned off, eviction, repossessions, and the costs of a bad credit rating.

Increase Your Income

A careful look at your budget may also cause you to reflect on ways that you can make your income stretch further.

Other Pages in this Section

Budgeting Tools
Sample Budget Worksheet
Evaluating and Reviewing your Budget