Our family got into the habit of keeping a household budget after our own personal financial crisis 14 years ago. I have no doubt that without budgeting every month and maintaining strict financial discipline, we would simply have got deeper and deeper into debt, becoming another credit statistic.
Today we are in a better financial position, but we still review our budget and financial goals at least twice a year. And I’ve noticed that our spending patterns change during those intervening months.
Despite our good intentions, we start spending more as the months pass since we last reviewed our budget. The longer the gaps between our budget reviews, the more we find we have spent on non-essential items. Our discipline and awareness gradually erodes over time.
Yet, my spending behaviour adjusts immediately after a budget review. I find myself more aware of what I am spending ‒ I check grocery prices before just throwing my usual brand into the trolley, and I find it far easier to walk past the clothing and homeware stores.
This renewed sense of discipline comes not only from an awareness that my spending is unchecked, but also the impact it is having on our true financial priorities. These include as our children’s education, retirement and reducing our mortgage, but also lifestyle choices like saving for a holiday or a new car. Those are far more important to me than a new pair of shoes or gadget for the kitchen.
Without that regular budget review I have no doubt that our finances would eventually return to chaos and those dreams and goals that really matter to us would never be realised.