According to a recent study, one in three American’s do not have a budget, which means there is a spending free for all, which is a scary thought. For those though that do carry a budget, in order to be successful it takes patience, discipline, and tweaks in order to remain successful. For the rest, here are ways your budget can fail.
Goals Were Too High
The most common reason for budgets to rail is because goals were set too high. When setting up the budget you probably thought we could easily save a certain amount of money, or eliminate unnecessary spending to a certain point, but you need to start small in order to work out. Small savings added up over the course of weeks, months, and a year can be huge savings, even if it does not seem like much at first.
Not Thinking Hard Enough About Making Purchases
It is easy to make purchases, especially online where you are not holding the item in your hand and having that in person transaction with the cashier, giving real thought about the purchase. Even thinking about how much you make on an hourly basis, and thinking how many hours of work it would take you to pay for this item might really put things into perspective.
Not Planning for Emergencies
There are plenty things that come up during a month that may not be factored in, such as birthday’s, holiday’s, but most importantly, emergencies. You will want to build a cushion into your budget so that you have the cash on hand and not have to put it on a credit card. Something that goes wrong with your car could set you back for months, so try and be prepared for expected and unexpected maintenance repairs.
Spouse Not on the Same Page
The budget will not be much of a success until both partners are on board, especially if one is much more of a big spender than the other. Review numbers on a monthly basis, going over line by line spending if you have to, and if you have not had the difficult talk yet about eliminating unnecessary charges, you will now. Perhaps one wants more discretionary spending, while the other wants to sock away some investment money. The point is, if you two aren’t on the same page it can spell disaster for your budget.
Adjustments Not Made
If the budget you have allocated is not working, and continues not to, then adjustments need to be made, either with spending, or the amounts you have allocated to expenses, while making sure there are contributions to spending accounts.
