Here is why your Personal Budget is failing


Probably you’re a serial budget maker. The spreadsheets, number-crunching, and the desire to keep your income and expenses organized all point to one thing; you love budgeting. Unfortunately, perhaps you have been nursing love-hate relationship with your budget for many years. You love how the plan organizes your money but hate how challenging it is to tweak your spending habits to fit what your budget is telling you.

So, what should you do when you realize that your budget is failing?


Adjust the budget?

Well, the primary cause of budget failure is human error. By investigating for possible errors and malpractices, you can figure out where you are wrong and correct your mistakes. Don’t be scared of your budget. Be vigilant and double-check it for accuracy to make sure it works with you, not against your financial goals. Here are the common reasons your personal budget is failing.

The budget is too restrictive

In your quest to save money, you might get tempted to strip your expenditure down to the minimum level and decide to live with it. If your plan works out, you may show a hefty surplus each month. But when it comes to the execution of a restrictive financial plan, things are different. Your desire to max out your allotted money might make you go beyond your minimum spending limits. Trust me, you will toss that financial plan in the garbage because it ‘can’t work!’

It’s wise to be ambitious and realistic as well. Use a very simple budget template that allows you to cut back a few of your expenses at a time rather than an instant, a complete overhaul of your lifestyle.

No goals

It’s motivating to keep your eyes on the prize, and financial goals can motivate you to stick to your budget. While ‘becoming rich’ is such an admirable target, it’s too broad to keep you on track when going gets challenging. Therefore, it’s advisable to set realistic, specific, and measurable financial goals.

You have never adjusted your budget since day 1

One unique thing about the budgeting process is that it’s all guesswork until you implement it. To draw up your budget, you can use pay stubs, credit card statements, and utility bills to create an accurate budget. However, that doesn’t mean everything will run smoothly forever. You should make the necessary adjustments each month to make it better. If you have never adjusted yours, it could be the reason the plan is tumbling down.

You never plan for emergencies

Your budget might work well until your toddler needs her tonsils removed, your dog breaks its paw, or your car requires a new transmission system. Any emergency expense can completely derail a budget that doesn’t account for such expenses. Before you know it, your savings and perhaps the entire month’s income is gone before you even pay rent.

And you hate budgets

Budgets have never been ‘be-all, end-all to personal finance management. If the thought of any budgeting task makes you steam, think of other ways of managing your funds. For instance, you can opt to withdraw the cash you need weekly or fortnightly.





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