What to Do When You've Blown Your Budget for the Month


You're a week into a new month, and you take a look at your bank account — only to find it dangerously low. You've spent way more than you had budgeted for way too early.

Overspending happens. Sometimes it's planned (like for a vacation), but other times things get out of control, emergencies occur, or you end up in situations where spending money legitimately seems like the best way out.

No matter the reason for your blown up budget, there are steps you can take to limit and mitigate the damage.

Assess the situation

Start by being completely honest with yourself about the situation. Determine what caused it, how much responsibility you bear, and whether it's going to be ongoing. For instance, a medical emergency could be over after a couple of days, or it could be something that you're going to need to budget for into the future.

If the budget blowout is your fault, admit your mistake. It helps to tell someone, whether it's your spouse, a good friend, or someone else you're close to. This makes it real, and it also means you'll have someone to keep you accountable.

If the issue was beyond your control, let yourself off the hook for any guilt. Emergencies happen. Simply focus on trying to bounce back and don't stew over the situation.

You also need to determine how you will be affected financially for the rest of the month. Do you have the money to cover your bills and expenses, or is this going to leave you totally strapped for cash? You can't bounce back until you know exactly where you stand.

Tap your emergency fund

While it's best to save an emergency fund for a true emergency, like a medical crisis or an essential car repair, you may need to use it to bail yourself out of a tough financial spot.

The key to using an emergency fund, though, is to replenish it afterward. If you overspent and it saved you, you need to start putting money back into it the following month. As long as you make sure you are doing this regularly, you will be more likely to have that financial cushion again when you need it.

Cut your losses

Stop spending wherever you can. No matter your situation, there are things you can do to spend less. Cut out restaurant and takeout meals and prep your own food at home. Pack a lunch to work. See if you can walk, bike, or even carpool to the office or out on errands. Don't spend money on anything that isn't an absolute necessity.

If you are in a budget hole of your own doing, this is the time to get strict with yourself. Maybe you need to spend a week of evenings at home instead of out with friends. Maybe you can invite them over instead of going out. Or, maybe you need to face your shopping addiction, and learn to cope with negative feelings in other ways.

No matter where you are and what is going on, the first thing you need to do is stem the outflow of money.

Make a plan

Once you know how you're going to stop the bleeding, it's time to make a plan for how you're going to cover your expenses and pay off any debt that has accrued.

If you're in the middle of a crisis, this may not be something you're able to do until later. If you can sit down and assess your finances, though, you will probably be better off. Grief and pain can be overwhelming, however, so if the best you can do is put things on a low-interest credit card until you can deal with them later, that's an acceptable temporary move. Just be sure to make paying off that credit card balance a priority once you're back on your feet.

Note that you may need to revamp your budget for a while to accommodate extra credit card payments or reestablish your emergency fund. You may even have to cut your spending for a few months into the future. Knowing this ahead of time can make those months less of a financial struggle.

This is also the time to look beyond the surface at what caused this crisis and determine whether you can do anything to keep it from happening again. Do you need a larger emergency fund? Do you need to cultivate more discipline with money? Do you need to talk to a therapist about how you feel when you spend? Make a plan not only to cover the amount you spent, but to keep yourself from similar situations in the future.

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