Having a monthly budget is important for planning financially. Knowing where our money is spent helps achieve financial goals. This can include getting out of debt or saving for retirement. The idea of tracking income and expenses seems like it should be an easy task. However, sticking to a budget is not always simple. It is important to understand the obstacles a monthly budget can have and how to deal with them.
Here are 4 Reasons Monthly Budgets Fail.
1. Motivation
Staying motivated to keep a budget will likely be a challenge at some point and this will specifically be the case if you are just starting one. Also, the enthusiasm for keeping track of monthly expenses does have odds of falling if the purpose is to pay off large amounts of debt. Having a few hundred dollars at the end of each month’s budget to pay off a debt that will take years at this pace can quickly sink the desire to remain encouraged.
When starting a budget or using it to get out of debt it is important to look at the big picture. Doing this will keep the plan alive. Think of something the end goal of having a financial plan will accomplish. This could be providing a better life for your children or being a homeowner. Take things a step further and track a budget with goals in mind using pictures and charts. The idea is to visually see the progress. This can help to stay on track.
2. No Room to Enjoy Life
A fast way to fail with having a budget is to not allocate something each month to enjoy yourself. No matter how small the amount might be it is very important. Without feeling some enjoyment from the income you earn, a budget is quickly derailed. Money should be saved each month and debt paid off when it exists. However, do not use every last nickel to pay everything if there is money left over. As little as $10-$20 a month can go a long way to take a day and enjoy something inexpensive. This will be important to do. Not taking some time for yourself will make a budget seem overwhelming. Bitter feelings for having one will develop.
3. Setting Unrealistic Goals
A monthly budget is not something that can never change. Although some fixed expenses are expected, fluctuations in income and expenditures require budget adjustments. Do not set unrealistic goals of saving or paying debts. Believing that every dollar left over at the end of the month is saved, is not realistic. Even the smallest things will come up each month that can require a little extra that was not in the budget.
4. Life Events and Unexpected Costs
Unexpected costs will happen with a budget. This is part of the purpose of having one. A monthly financial picture allows you to save a little every month. This money can be used for life events that will come up. Cars need repairs. People become ill and need to see a doctor. Things in general break and need replacement or repair. Sometimes things happen that cost more than we may be able to initially afford. Do not let these things get in the way of continuing to have a monthly budget. Hopefully, some money is already put aside to cover part or the entire cost of unexpected events. There is no control over some things and it should not be a reason to stop budgeting.
The only way to recover from unexpected expenses is to remain to keep on a budget. Not doing this can make things much worse than they need to be.
Final Word
A monthly budget is not something fun to sit down and do each month for most people. It can be both exhausting and depressing depending on a person’s situation. If the purpose to start a budget is to pay off debt, there is no doubt motivation will be a challenge at one point or another.
To keep on track with a budget make sure to look at the big picture. Leave room to take some time away from dealing with it all. Do not make budget goals unrealistic or let unexpected costs be the reason to not continue with having a financial plan each month. Things are going to happen. Prices for daily living change and there is no control over everything that has a cost.
The best part of a budget each month is knowing how money spent. This allows us to reach financial goals. Budgets can be fun and rewarding. When there is money left at the end of the month that is either saved, invested or used for a debt you can see results. This is a reason to never just give up on budgeting.
