Skip to Content

Is Budgeting A Continuous Process? How To Be A Budgeting Ninja

Is Budgeting A Continuous Process? How To Be A Budgeting Ninja

Budgeting is a continuous process that involves reflecting back on what you had cast with your previous budget, comparing your forecast to what actually happened, understanding why the budget didn’t align with actual expects, and making the necessary changes with your forecasts for the next budgeting period.

The budgeting process can be as simple as performing these steps in order: create a budget for a given time period, at the end of the time period do a thorough analysis of the budget against what actually happened, where variances have occurred make any necessary amendments, and then cast another budget based on these changes.

Thankfully, this process isn’t rocket surgery!

Getting Started

When you first start out with a budget, you may find your initial forecasting expectations don’t align with what actually happened, and this can be quite the shock!

But don’t give up!

Instead of seeing budget as a waste of time, use the experience to refine your budget better. Ask yourself questions like:

  • What did I miss?
  • What was my expectation based on?

What you will tend to find when you first start out with the budgeting process is that your first budget will be the worst because you failed to think of certain items, or that your expectations were below or above what you spend.

A great example for me was when I predicted what I thought we spent on groceries per week. With our first budget I thought we spent around $150 per week, but then after checking this against what we actually spent it ended up being $250 per week!

I then made the necessary adjustments to the budget and next time I ended up being spot on with our grocery bill.

As you continue to check your budgeted expectations against what actually happened you will always be refining your figures.

Common Refinements

Throughout the budgeting process there have been several things I’ve noticed for why the budget didn’t actually align to the actual money spent or received, heed these things when you are casting your budget:

Irregular Cycles

There are certain budget items that have irregular cycles such as travel (or holidays – sometimes we’ll travel in the summer, other times in autumn).

Irregular Amounts

Then there are things that have irregular amounts, such as utility bills, grocery bills, transport costs – such as car maintenance, or fuel.

Seasonal Items

Some expenses can be quite seasonal in nature, such as your utility bills (I’ve found our electricity budget is less in the autumn and spring, and highest in the winter and summer).

Multi-Year Items

Then there are items which are renewed over a multi-year cycle such as driver’s licence, and passport renewal.

By considering the different types of items to budget and when they recur, it can better prepare you in your forecasts and not be as shocking when you come to compare it to what actually happened.

When Should You Compare Your Budget Against Actuals?

You should be in the habit of checking your budget regularly, especially if your budget is cast over a long period (a month or more) as it can be easy to forget what you allocated to spend for a particular item.

By checking your budget regularly, you will already be seeing where things have gone a little awry with your budget. If so, don’t panic and make notes as you go on what needs to change. If you’re doing this with your spouse let them know too as soon as you do so that it’s not a shock for them.

However, at the very latest, you will need to perform your analysis of budget to actuals at the very end of your budgeting period. If you don’t, then you’re budgeting is a waste of time and a pointless exercise.

By checking against your actuals this means you’re already correctly categorising your transactions as you go. Whether you use your banks classifications, or have created your own in Pocketbook, or have paid for a proper bookkeeping package such as Quickbooks, you have to get a report of what you spent per category and then compare these totals against your budget.

This can be a time-consuming exercise, and to do it right you need to be able to have the ability of obtaining a report from your bank, or software.

The first time you do this, you might want to see if there are options in your bank account to download a CSV file of your transactions and to create a spreadsheet that automatically sums the category totals.

Otherwise, if you’re using software, such as Quickbooks, generating a report for a given period is effortless.

Once you have your report, you need to go through each category and compare line by line to your budget. You need to be asking yourself the following questions as you do:

  1. Did this category match what I thought? If not, why not?
  2. Did I miss this category? If so, will it occur again?

By asking these two questions about your actual spending you’re in a better place to refine your budget.

Then, from your findings, make the necessary adjustments to your budget to better improve the forecast for the next budgeting period.


In the end, budgeting is a skill. It’s one that you can learn to do well if you know how and make adjustments as necessary.

So give it a go!

Start with these simple steps to get started, and then take your time doing more research into what really works best for you. Remember that your initial budget, and your intial comparison, will take time to do so allow yourself some time to get these things done right.

And at the end of the day, through continued practice and a little effort at first you’ll get better at it and the adjustments performed will not be as much as they were when you first started.

I hope after a few budget cycles you find that once you start budgeting – you never want to stop!

Keep at it and keep refining.

Soon you’ll be a budgeting ninja!