It's a common scenario...
You've been meticulously logging every transaction into your budgeting software. Like counting calories, you've sacrificed heavy spending and watched each cent as it left your bank account.
Then the frustration sinks in.
"My bank account doesn't match my budget!"
If this has happened to you, you're not alone. In fact, it's SO common that I've almost concluded it's a scientific law that bank accounts and budgeting softwares will never 100% match up (I'm partly joking).
So before you spend hours retracing your steps, take a look at these 4 common reasons your budget doesn't match your account.
1. Un-Entered Transactions
This one one is pretty obvious, but sometimes the obvious is the best place to start. If you have a software that requires you to manually enter your spending, make sure you're entering everything and didn't overlook an expense or two.
2. Using Rough Numbers
I know I've been guilty of this. Rounding numbers to the nearest dollar (or five or ten). Or even guesstimating how much I spent because I can't find the receipt and I'm too lazy to open the bank account. If you want the bank to match, make sure your entries are spot on.
3. The Plus/Minus Dilemma
If you use a software that links to your accounts, this one is a pretty common annoyance. You transfer some money to another account, or go to make an extra payment on your linked credit card, and you see the transaction shows up twice- once as a plus and once as a minus. This is because each account is sending the data separately (one is having money removed and the other is receiving it). If you log both of them you'll see your bank and budget no longer line up. I suggest logging one and deleting the other. Rule of thumb? If it's a plus sign transaction, it's either income or a debt payment. If it's a minus then it's an expense.
4. Previous Month Hangover
This usually happens when you over spent the previous month and now you're starting this month with less than what you planned. I see this most when you're paid for the next month early and you start spending it. Let's say your first December paycheck is $1,000, but you're given that check on November 26th. Over the last 4 days of November you spend $200 of it. Technically you're starting December with $800. If you planned your budget based on the $1,000, your budget no longer balances with your bank account.
There could be a ton of other reasons why your budget and bank account don't line up. Give yourself some grace and know that you're still making progress, even if it's not perfect.
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