Tag Archive for budgets

5 Reasons Your Budget Fails Every Month

5 Reasons Your Budget Fails Every Month

5 Reasons Your Budget Fails Every MonthAs you already know, budgeting is a key skill that can help you keep your finances on track in both the short and long-term. However, even if you take the time to craft a budget for your household, you might find that you have trouble hitting the mark each month.

There can be a variety of reasons for coming up short on your budget, and you will need to figure out exactly what is going wrong if you are going to resolve the problem. Below is a list of five potential reasons your budget fails?every month.

Overly Optimistic

More than anything, a budget needs to be realistic. If you aren’t realistic with the budgetary expectations that you set each month, you are inevitably going to fall short.

It might be tempting to think, for example, that you can cut back on your food costs by 20% in the months ahead. However, is that really possible, or are you just setting yourself up for failure?

Be realistic with what is possible and chart a course that you will actually be able to stick with over time.

Losing Track of the Little Things

In the world of budgeting, the little things can add up in a big way, causing you to overspend your budget. What counts as a little thing? For the purposes of this example, let’s count anything under $5 as being a ‘little thing’.

That means snacks that you might buy during your break at work, or the coffee you pick up in the morning rather than making your own cup. None of these expenses seems very important at the time, but they can be crippling to your budget when all added up.

Procrastination

Even if you have already taken the time to think out your budget, it can still be tempting to put off the actual execution of the budget until ‘next month’. Of course, next month never comes and you keep doing the same things over and over again. This can be a difficult cycle to break, but you must find a way if you are going to finally make progress in your financial life.

One Big Mistake

Some people see their budget undone by a series of small purchases throughout the month, while others tend to make just one big mistake which sets them back. If you have a habit of spending a significant amount of money on one big purchase each month, try setting a spending limit for yourself with regard to single items.

For example, if you are thinking about buying anything over $100, you have to stop and think about it for an extra day before making the purchase. By giving yourself a 24-hour period to think about the expense, you may realize that you don’t need to buy that item after all.

You Don’t Have a Budget in the First Place

Of course, your budget can’t work if you don’t have one in the first place. If you don’t bother to take the time to construct a realistic, reasonable budget for yourself and your family, you will have no way to know how much you can spend on a monthly basis. Building a budget actually doesn’t take very much time at all, and yet it can be one of the best things you ever do for your financial life.

 

Does your budget fail often? Have you noticed any of these things causing your budget fails?

 

Photo courtesy of: RyanMcGuire

6 Things People Often Forget to Budget For

6 Things People Often Forget to Budget For

6 Things People Often Forget to Budget ForSetting up your first budget can seem daunting. You have to gather together all of your bills and paperwork from the past few months so you can see what you are really earning and spending each month.

But there are a few expenses that you don’t necessarily get an actual “bill” for every month. These are the things that are harder to predict and you might forget to budget for them all together.

Household Supplies

This is something I always forget about. When calculating what how much money to dedicate?to supplies for your home, don?t forget to add money in there for toilet paper and cleaning supplies. It?s amazing how quickly you can go over budget when you forget to add in things like that.

You may not spend money every month on these items but having it there keeps your budget on track and allows you to save that little bit extra that you don’t spend each month for larger household purchases when things run out or need replaced.

Eating Out

One way to budget for eating out is to group it in with groceries. But, it?s easier to track what you are spending when you go out to eat if it is separate versus together with food. You most likely spend more than you think eating out. By tracking this separately, you can adjust and plan for nights out or make sure to keep some quick meals in the pantry for those evenings you don?t want to cook an elaborate meal. This is the area of my budget where I’ve had to make the most adjustments over time.

Medicine and?Doctor’s Appointments

Many budget templates have a place for you to plan for medical costs, like doctor’s appointments. But even if you don’t visit the doctor often, you still need to fund this category. Even basics like [easyazon_link keywords=”ibuprofen” locale=”US” nw=”y” tag=”wisedollar-20″]ibuprofen[/easyazon_link] costs money, as well as first aide equipment, and [easyazon_link keywords=”personal hygiene products” locale=”US” nw=”y” tag=”wisedollar-20″]personal hygiene products[/easyazon_link] that you might decide to include in this category. Once again, these aren?t things you have to buy?all the time, but accounting for them in your budget helps you stay on task and change purchase habits as necessary.

Auto Accessories

If you have a car payment, you definitely budget for that. You probably also remember to plan for gas and insurance too. ?But one thing a lot of people forget to budget for is other expenses related to their car. Don?t forget about the potential for tires, trips to the car wash, windshield wipers, etc. Eventually you’ll have to use this money for other repairs and maintenance costs as well, so it’s a good idea to carry that money forward as a “buffer”.

Gifts

When you think gifts the first thing you think of is Christmas. One way to budget and save for Christmas gifts is to join a savings program at your bank or put money aside throughout the year so you?don?t spend as much come December. But, what about birthdays? Or a?baby shower for a close friend? By setting a little more aside than just your Christmas money, you’ll be able to buy gifts for these occasions when they arise without feeling stressed.

Memberships

Do you like going to the gym? Do you have a professional or hobby group you like being a part of? Does your alma mater mean a lot? If you have memberships, be sure to account for those in your budget as well.

One way to avoid missing anything in your budget is to track your spending for a few months before making a budget. This way you’ll be able to see what you are spending on and how much these things really cost. There may be a category you didn?t realize you buy a lot of but need to account for it in your budget. The good thing about a budget is that it is not set in stone. Adjust as you need but don?t forget the little things as they are what can add up the most.

 

Have you had to make adjustments to your budget? Have you ever forgot to budget for something?

 

Photo courtesy of: Daw8ID