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Step 1 |
Determine if you want to keep your budget type. If you don’t, take time to evaluate the different types and choose another one. If you do, save your current budget sheet and create a clear copy. The goal is to give yourself a fresh start.
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Step 2 |
Look at prior budgets and identify budget decisions that worked well for you. Don’t dwell on your mistakes; learn from them and improve your process. Collect information on current income, routine expenditures and spending patterns.
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Step 3 |
Review your financial plans and assess your progress. You may want to make some changes there, too and this might be a good time to do that. It is important to consider the reasons you feel a budget change is necessary at this time and avoid reacting emotionally. Be intentional about the changes you make to your budget. Think about why you are making them and what the long-term effect of these changes will be.
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Step 4 |
Make a list of your debt balances. Think about ways to pay them off more quickly. Evaluate the health of your checking and savings accounts: Do you ever have checks returned due to insufficient funds? Have you paid back all of the money you borrowed from yourself?
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Once you have a clear understanding of your current financial status, you are ready to revise your budget accordingly.