8 Questions Only You Can Answer About Your Money Habits (2024)

Whether you use an app, an Excel spreadsheet or a pen and notebook, your budget isn’t something you just blindly copy over month after month.

You should take a little time at the end of each month or the beginning of the next to reflect on your finances and determine whether you need to make any adjustments for the month ahead.

Your spending isn’t necessarily the same month after month, so your budget shouldn’t be either.

8 Budgeting Questions to Reflect on Each Month

Ask yourself these questions as you close out your budget each month to create the best spending plan for the month ahead.

1. How Did My Actual Spending Compare to My Projected Spending?

This is the most obvious question you’ll want to ask yourself as you reflect on your spending from the past several weeks.

Did your actual spending match up with the amount of money you intended to spend in each budget category? Where did you overspend? Where did you spend less than anticipated?

2. How Do I Want to Allocate Any Surplus Money From Last Month?

If you ended up spending less than you budgeted for the month, what’s your plan for that extra money?

You have a few options. You can roll that money into the upcoming month’s budget so you’ll have more available. You could put the money into savings — whether that’s to build up your emergency fund, pad your ongoing sinking funds or add to short- or long-term savings goals.

You could invest the money in an IRA or a taxable brokerage account. You could give back by donating to a nonprofit organization. Or you might want to use the money to treat yourself to something nice.

It’s totally up to you.

3. What Was the Reason for Any Overspending?

If you spent more money than you anticipated, don’t be hard on yourself, but take a moment to analyze what caused the overspending.

Did you turn to retail therapy to counteract a stressful week? Did an emergency arise that you couldn’t have predicted?

It’s important to have an emergency fund to pull money from when the unexpected occurs. Check out these steps to starting an emergency fund.

Did you order takeout too much? Did you forget to factor a major expense into your budget? Is your budget so restrictive to begin with that your spending limits are just unrealistic?

Reflect on why you spent more than you planned and what you could do differently next month.

4. Do I Need to Adjust Spending Limits for the Month Ahead?

As mentioned earlier, you don’t want to copy and paste your budget from month to month if your spending tends to fluctuate.

There may be some budget categories that remain consistent, like the amount you pay for rent or your monthly cell phone bill.

However, you can expect a higher electric bill during cold months when you’ve got the heat up high or hot months when you’re blasting the A/C. If you’re in a blended family and have your stepkids living with you every other weekend, you’ll need to budget more for groceries when you’ve got a full house.

You’ll need to adjust your budget if you’ve got an upcoming event, special occasion or trip taking place in the month ahead. And if you’ve just paid off a credit card or loan, you’ll want to reallocate the money you were putting toward that debt.

You should also adjust your spending limits if you’re consistently coming in over budget or under budget in a particular budget category — for example, if your default monthly gas budget has been $50 but you’re always spending about $75 to fuel up each month. If you’ve put in the effort to cut costs in that category, it’s likely that your spending limit is unrealistic for your circ*mstances.

5. How Do I Feel About the Purchases I Made?

In addition to reflecting on the dollars and cents of your spending, it’s also important to be mindful about your feelings associated with your spending — particularly when it comes to discretionary spending.

Are you satisfied with the things you bought? Were they useful? Did your purchases bring you happiness? Or do you feel as though you wasted your money or rushed into making a purchase? Do you have regrets?

Keeping tabs on the emotions you feel after spending money can help you identify patterns you might need to correct. For example, if you often regret the impulse buys you make, you can keep a running list of what you want to buy but give yourself a week or more to think it through instead of buying it on the spot.

Looking to incorporate more mindfulness into your budget? Try kakeibo, a longstanding Japanese budgeting method.

6. How Am I Tracking Toward My Goals?

When you’re closing out one month’s budget and creating the next month’s, it’s a good time to check in on your progress toward your money goals.

Are you on the right track to meet your savings goals? How are you coming along on your debt payoff plan? Did your credit score go up any?

The ultimate purpose of your budget is to make a plan for your money so you’re able to hit your financial priorities. Paying your bills on time and having enough on a day-to-day basis to cover necessities is great — but don’t forget about your big-picture goals as well.

7. Where Can I Cut Back on Spending?

As you’re creating your monthly budget, take a look at last month’s spending to see where you can reduce your expenses.

You’ll have more wiggle room if you can eliminate unnecessary spending, like subscriptions you don’t use. Consider what services you pay to have done that you might be able to do yourself, such as styling your hair at home rather than going to a salon.

Don’t just focus on your discretionary spending. Look through your essential purchases and identify one way you can reduce costs. Here’s one: Call your insurance company to ask about available discounts or if they’d match a competitor’s quote. Or try lowering your utility bills by being more conscious about your water and electricity usage.

8. How Can I Increase My Income?

No matter how well you are at money management, you can’t budget your way to wealth if you’re not bringing in enough income.

You can increase your income in a number of ways. At work, you could ask to take on more hours, work overtime or negotiate a wage increase. You could supplement your regular job with a side hustle or a stream of passive income. You can also increase your cash flow by selling items around your house.

Looking for a better-paying job is another way to increase your income. Just be careful not to give in to lifestyle inflation. Focus on your personal money goals rather than upgrading your lifestyle to keep up with the Joneses.

Nicole Dow is a senior writer at The Penny Hoarder.