Why are my numbers being consistently “overbudget”?

Hey budgeting people,

Today as I was prepping for my yearly review. Yes, I know its July, but I figured, I would get a head start. Mainly because there were a few months I didn’t track my spending.

However, as I was reconciling all my budgets, I noticed all my budgets were over their categories. Even the month I followed my budget 100% and to the cent.

At first, I was concerned, however I realised that it wasn’t just because I wasn’t following my budget but also a mix up between when I get paid and where the calendar fell.

I realised, that money I had “spent” which tipped my categories over, had been when I was using the previous month’s pay-check.

This happens because I get paid on the first Friday of every month, but I budget from the 1st.  

The second issue which makes it appear that I am constantly overspending is that the bank takes a few days to process transactions. Sometimes I would spend the money and then it would pop up on the first or second of the next month, but I spent it on the 29th.

While doing my budget, I start tracking at the first of the month. So even though I am using last months money, it appears like I am going over. This is most noticeable this month (July ‘19).

It isn’t just the fact it takes a few days – it is the fact that it takes a different amount of time to process each transaction. While it is usually two to three days, it can take up to nine days.

Yes, nine. Honestly, in which I find very stressful.

That is the longest it has taken. I am sure you agree, that is a crazy wait period, for a transaction to go through.

It go to the point, I was concerned that I had accidently put in the wrong information . The company I was paying told me that they received the funds, but my bank was insisting the money was still in my account. 

Luckily it finally registered, and the bank took the funds away. Which is fantastic as I didn’t have to get involved.

Whilst I feel like there is something I should do to “fix” my system, I don’t like having different month on the spending tracker. That may sound stubborn, but I like having clear dates on when I start new budget and when I stop the previous one. It gives me boundaries, and if that is constantly changing, I will get frustrated and just stop budgeting all together.

Something I struggle with, all the time, as it is. A solution I am considering is having spending freezes on the last week of each month, until my paycheck has cleared. This is in order to counteract the processing issues.

I am also looking into doing cash envelops as I feel that it would make me more accountable. It will also stop issues with processing as I am not relying on a computer.

Please let me know what you think!

Thank you for reading and helping me through my budgeting woes!

Comment time questions; Let me pick your brains for a few moments…

How do you deal with the transaction processing taking multiple days?

Also, who else budgets to a different timeframe to your actual pay-checks?

Are there any solutions I haven’t mentioned?

Please let me know how you find cash envelopes. Do you love them? Hate them?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.