Was a household budget part of your New Year’s resolution but you never got around to it? You are not the only one. According to a recent Gallup poll, 1-in-3 American’s do not have a budget, and a scary thought that two-thirds of all households do not have a plan and are a free-for-all. Now for the third of homes that do have a budget, it does not mean that yours will work. Following a strict budget is not easy; it takes a lot of work, patience, and discipline. If it were, more people would have one. Often, budgets start to be ignored and pretty soon are not followed at all, getting back to prior bad spending habits. Now why do budgets fail?
The most common reason for an unsuccessful budget is too high of goals. Much like going on a diet and saying you are going to lose a quick 30 pounds, it is not realistic. Same goes with spending, if you say you are going to cut out unnecessary spending all together you are just setting yourself up to fail. Start with obtainable goals, such as limiting going out to eat only on the weekends, going to the bar once a week, something that you can achieve. At the end of the month, it is important to review all spending and see how you fell in line with your plan. If you said you could spend $100 a week on fun, but ended up spending $700 this month, it is time to review your spending. Forgetting upcoming planned expenses is another reason for a failed budget. If you know you have your anniversary or a family member’s birthday coming up, make sure it is accounted for in the budget, as well as car maintenance, quarterly bills such as water bills, or yearly insurance or registration costs. The more you budget for, the less you will go over.
In the end, spending too much is really what causes budgets to fail. You really need to examine monthly expenses, account for payments, utilities, gas, groceries, and account for a little extra fun money after the remainder goes to savings. Controlling overspending takes discipline, and it will not happen overnight. Using credit cards with seemingly endless credit limits will not curb spending, but only get you in the hole deeper each month. Take a hard look at spending each month and try and stay on track.