9 Reasons Your Budget Is Failing

budget, budgeting, reasons a budget fails, failing budget, 9 reasons your budget is failing

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budget, budgeting, reasons a budget fails, failing budget, 9 reasons your budget is failing

9 Reasons Your Budget Is Failing – You have a budget in place (great!), but month after month you keep going over. Not so great. You feel like giving up and throwing in the towel altogether. That’s because creating a budget isn’t hard. Sticking to it IS. Don’t let that happen. Instead, look at the 9 reasons your budget is failing!

 

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1. Your Budget Isn’t Ideal

If your budget doesn’t closely reflect your situation, it will fail without question. You have to start off on the right foot for it to ever work. Everything has to align. Carefully review your income and all expenses. Does it seem skewed? If so, take a closer look and make adjustments. Continue making changes as needed. Keep in mind that no one expects you to get it right the first time. It takes practice and that’s perfectly alright.

 

2. You View Your Budget As A Hindrance

Your budget is actually a monumental positive that gives you the upper hand in life. This might not always be easy to see. You may catch yourself feeling that your budget is an obstacle – a burden that’s holding you back. The truth is, a budget isn’t a hindrance at all. Throw those negative thoughts out the window before they wreak havoc.

 

3. You Don’t Have An Emergency Fund

If an emergency were to happen, where would the money to cover it come from? Would it come directly out of your monthly budget? If so, you’re setting your budget up to fail. To ensure that your budget succeeds, create an emergency fund and keep it separate from your other funds. It’s recommended that you build it to $1,000 (or 3-6 month’s worth of expenses). The next time something unforeseeable happens, your budget won’t take the hit.

 

4. Your Better Half

When you create a budget, you have to think far beyond yourself. After all, your budget effects everyone living in your household. You need to communicate with your partner. Excluding them can derail your entire budget.

 

Knowing is half the battle. Have a meeting with your better half and go over all the numbers together. Review your income, expenses, and settle on a budget that you can both work toward. Now that they’re included and are in-the-know, it’s their responsibility to stick to the budget. To make sure they’re on board, emphasize how important this is and the opportunities it would afford your family.

 

5. You Don’t Budget Every Single Dollar

When you have a budget, you need to follow each and every dollar. You have to tell each of these dollars where it’s going each month. This ensures that you don’t spend more than you make. If you’re using the zero-sum budget, put any money left over toward debt, into savings, or a retirement fund.

 

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6. You Don’t Set Financial Goals

An often overlooked step in budgeting is making sure to establish financial goals. When you have something specific in mind, it helps you stay focused on sticking with your budget. If you’re working toward something you really want, it becomes much easier to say ‘no’ to unnecessary purchases. When setting financial goals, be specific, set deadlines, and be sure to include your partner.

 

Your financial goals may look something like this:
  • Where you would like to see yourself in 1 year
  • 5 years?
  • Grow your retirement fund
  • Pay off your home in X years
  • Start a 529 plan for the kids

 

7. You Only Budget For A ‘Typical’ Month

Let’s face it, no 2 months are going to be exactly the same – and you need to prepare your budget for this. You can’t do your budget once and expect to follow that exact budget month-to-month. This won’t work. As the seasons and months change, keep in mind that electric and gas bills are a lot more in the Winter. And that hefty insurance premium that’s due once a year? Back-to-school shopping? Factor those in, too. It’s more work, but if your budget is going to thrive you need to make a new budget each month.

 

8. You Don’t Really Care

For your budget to succeed, you can’t view it with a nonchalant attitude. Instead, own it! Make it a fun challenge for yourself and put it front and center of what’s important to you. Treat yourself to a little something special for turning your attitude around. Going in without caring shows in your budget and opens the door for things to slide. It’s a good way to crash and burn.

 

9. You’re Not Using The Envelope System

You need to have a system in place to keep you from going over budget. It’s super helpful to use either a cash envelope system or digital envelope system. With the cash system, it’s game over when the cash runs out. If you use the digital system, you’ll receive an alert when your budget is running low. At this point, you stop spending. It’s that easy.

 

Now that you know how your budget got thrown off course, take control and do something about it. Look at all the reasons that applied to you and make the appropriate changes. No one said budgeting was easy, but I assure you – hope isn’t lost and it’s absolutely worth it! Sometimes all it takes is a few small tweaks to get you where you need to be.

 

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