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I totally blew my budget…now what?

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Just got back from New York yesterday. I was there visiting friends, partying, and doing some business. I had some especially memorable times, including eating 10 slices of pizza in 4 days, getting utterly shut down by some women, and wondering how the hell my investment banking friends work until 1 AM EVERY DAY OF THE WEEK.

Anyway, I also completely overspent my budget. I had withdrawn a little bit over $300 and ended up spending more than double that. Oops.

So what do you do when you blow your budget for a special occasion?

There are fundamentally two ways to make money: cut costs or earn more money. For most people, it’s easier to cut costs from dumb things like eating out, premium fuel, etc (read more about saving money). I always tell people that after they track spending for 4-6 weeks and understand their spending, they should immediately cut 10% off their expenses–at least.

But I can’t just cut over $400 of spending to get back on track–my budget’s already pretty lean as it is. So I’ve got one more choice: make more money. How? I’m going to pick up a couple of small consulting contracts I’ve been putting off. I’m going to do some surveys that pay students to evaluate products/services. And I’m going to spend a few hours marketing another site I run (shameless plug: BitterShirts.com for funny t-shirts).

“But Ramit,” you might say as I tune you out, “I don’t run a t-shirt site or blah blah blah.” Those are just examples. Here are a few easy steps to getting back on budget:

  1. Figure out how much you’re down. Once you have an amount, you know exactly how much you need to make back.
  2. Set a time limit. Lazy-ass people say “I’ll get it back sometime” while munching on a burrito (not sure why, but that just makes me think of someone lazy). Be real and set a deadline for yourself.
  3. Make more money by looking around you. Does your boss have a small gig that he needs done? Can you pick up extra hours at work? Maybe your friends or family know some small projects on the side. Babysitting? One more thing–don’t be ashamed of asking for extra work. There’s nothing wrong with you for occasionally being below budget; we just have a horribly secretive culture when it comes to talking about money. Ask around–you’ll be surprised. Pretty soon, you’ll be back on budget.

Update: Success! It took me 1 month and 7 days to achieve my goal. I couldn’t find any good surveys to do, but I had some good luck and actually beat my goal by about 25% due to good t-shirt sales and a couple of consulting projects.

Now what?

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