Many of us start the year with the best intentions. ‘This year, will be different’, you say to yourself. You just want you and your money to get along. You start a budget, but you just can’t keep one. Before you decide to throw in the towel, remember, it’s not you, but it may be your budget.
There are many reasons why your budget isn’t working. It’s not that they don’t work, they actually do – budgeting has helped us out tremendously – but why and how you choose to budget is just as important as getting started. So hopefully you and your budget can learn to reconcile your differences and become friends again.
Here are some potential factors that can cause a budget breakup:
1. You’re not planning for the unexpected
Things happen. Sometimes unexpectedly. And sometimes all at once. Without a plan, something eventually breaks down and next thing you know, you’re just playing catch up.
That’s why it’s doubly important to make sure you’re doubly protected. Set aside some room in your budget each month to build an emergency reserve to help plan for and cover potential breakdown/replacement costs or protect yourself from an unexpected job loss or any other type of emergency, for that matter.
2. Your budget is too restrictive
Having a restrictive budget can put a strain on your finances. There’s no fun in budgeting if you don’t budget in the fun stuff. Yes, we use budgets to make sure we have enough to put a roof over our head and food on the table, but it’s equally important to give yourself some breathing room to set aside a little money each month for that vacation you always wanted, or some nights out with friends. When all you’re doing is looking forward to paying the next bill, budgets can quickly get demotivating and easily derail any other plans you had. Budgets are always changing and should be flexible.
3. You’re over-complicating it
No one said it was going to be easy. Anything you’re not used to doing is going to be difficult at first. But it’s easy to get carried away when first setting up your budget by listing every category under the sun. So just because I or any other blogger has posted a list of categories a budget should have, those are just suggestions. The categories should work for you. If you can simplify some areas of your list, it’ll make things a whole lot easier in the long run.
And if you can find ways to automate areas of your budget, all the better. For example, if you set aside a certain amount in your budget for savings each month, don’t waste time trying to remember to do that, because in most cases you likely won’t. Instead, have that amount automatically deducted each period from your checking account and into your savings/investment account. The same goes for bill payments. We have most of our fixed bills set up as pre-authorized payments, so we don’t have to worry about missing those bills again. The easier your budget is to implement, the more likely you are to stick with it.
4. Your budget is goal-less
There’s a reason for everything, why not make one for your budget. Yes, budgets help you to make sure you’re not overspending what you’re actually taking in, but they also serve the purpose of making sure you’re on track to meeting your goals. For most, it shouldn’t take much to stay above the zero line. But the really great thing about budgets is they’re a useful tool for planning and managing your money. Whether planning your next family vacation, helping to fund your son/daughter’s college education or your own retirement, every dollar should have a purpose – and so should your budget.
5. You’re not using the right tools
I know many say it’s not about the tools, it’s how you use them, but if you’re not motivated to use them, then you’re probably using the wrong tool. I’ve tried literally dozens of budgeting applications and most were an over-complicated mess. So I stuck to my own spreadsheets for years, until moving to Pearbudget‘s and eventually their online version. Although there’s no program out there that does everything I would like it to do. Whether it’s pencil and paper, spreadsheets, fully automated desktop software or smartphone apps, choose budgeting tools that work for you and your lifestyle.
6. You’re going it alone
Unless you’re single, there’s no reason to be single about your budget. Nothing will make a budget fall apart faster, than if your spouse or partner is not on the same page as you regarding your finances. It’s so important that you work together and set common goals. Everyone will have slightly different priorities, but you both should have common things that you, as a couple, as a family are working towards.
So before you give in and think that budgets simply don’t work, think about what you could do to turn things around. Reignite that old spark and become your budget’s new BFF.