How To Deal With a Budgeting Setback

What do you do when your daughter needs a $900 root canal (after insurance), your husband’s truck needs $1600 worth of repairs and your other daughter breaks her foot in just two weeks time?

This is exactly what happened to my friend Stacy. These unexpected expenses busted her budget and brought her debt snowball to a screeching halt.

“So far 2019 doesn’t seem the year for us to stick to a budget.” She lamented.

If you’ve ever set out to accomplish big goals like keeping a tight budget, saving or getting out of debt, it can be incredibly discouraging and frustrating when it feels like you’ve been dealt a bad hand.

But, that’s life: unexpected and full of surprises.

If you’ve found yourself in a situation like Stacy, I want to give you three practical tips for dealing with a budgeting setback.

How To Deal With a Budgeting Setback

1. Shift Your Thinking

While you may not have been able to anticipate that unexpected dental bill or broken bone, you can control how you think about the circumstances and your reaction. You can give up on your budget and go back to old spending habits (that got you into debt in the first place), or you can acknowledge the obstacle and roll with the punches!

Thinking “this is the worst news ever. I’ll never get ahead,” will likely cause you to feel hopeless or apathetic. Whereas, thinking, “this wasn’t expected, but we can manage,” may cause you to feel hopeful and committed.

Someone feeling apathetic will take very different actions than someone feeling hopeful.

To stay engaged with your goals, changing the way you think about your circumstance can make the biggest difference in how you attack future obstacles and move forward in achieving your goals.

2. Create a plan

When unexpected events occur, hold an emergency budgeting meeting (which is a fancy way to way discuss your budget with your spouse). Evaluate your finances and create a plan together.

• If you’re using Dave Ramsey’s Debt Snowball Concept to pay off debt, you may have to put your snowball on pause until you can cover the surprise bills.
• Avoid using credit cards or getting new loans to cover your emergency. You don’t want to amass more debt and get into a deeper hole.
• Work with any companies to create an affordable payment plan, especially if you don’t have an emergency fund to cover the expenses. Doctors, dentists, vets, and various other companies will work with you. They want to get paid!
• Get scrappy! Try making some extra cash by selling household items for cash, providing a service for people in your community or getting a part-time job.

3. Don’t give up!

The other day I heard the greatest analogy that will forever change my outlook on dealing with setbacks and it goes like this…

When you decide to go to the grocery store, you get in our car and we go. Along the way, you may encounter bad drivers, red lights, stop signs and even traffic.

In none of those circumstances do you say, “That’s it! I’ll never get to the store. I’m turning around,” and abandon our plan to get groceries. Instead, you know that if you keep going, you’ll make it to the store and get what you came for.

The same is true with your financial (and even personal or business) goals. You may get stopped for a little while but the light will turn green and you will keep making forward progress to your goals.

Don’t give up.