4 Reasons Your Personal Budget Fails
Living from paycheck-to-paycheck is a symptom of not having a budget. For the many of us though, creating a budget is the easiest thing to do but the hardest to follow. Why does sticking to the budget that difficult? Let us take a look at the top reasons why personal budgeting often fails.
You cut out the fun altogether
Yes, budgeting may mean eliminating the unimportant stuff and prioritizing the bills, the food, and the rent; however, don’t left out the “fun” of the budget entirely!
By crossing out your personal entertainment/enjoyment needs from the budget, you could end up using what extra money you have left for travel, dine outs, shopping or any hobby to give yourself relief from the daily grind.
You have unrealistic budget expectations
Having a budget does not mean you will suddenly have a lot of excess funds to use. The goal of budgeting is to ensure that your expenses are within your income so that you can enjoy a comfortable life while providing for the essentials.
Your budget is not tied to personal goals
Budget should be linked to personal goals to ensure that they’re effective. Doing so create an innate motivation to stick to the financial plan. It is hard to put aside $1,000 per month just because saving is a good thing. You need to have a personal reason for doing so. For instance, a vacation, a car, a house, or comfortable retirement, and the like.
You’re not anticipating the unexpected expenses
Unexpected expenses are the number one budget killers. Just when you thought you have every cost factored in, they can pop out of the blue and push you too veer off your budgeting course. So, prepare for those bills that happen once every few months or years, such as oil changes, car insurance and registration, account maintenance fees, magazine subscriptions, and credit card interest.
If you can get over these hurdles and master the art of budgeting, achieving your financial goals will be easier.