If you have a budget, then you’ve taken the first big step toward controlling your finances! Unfortunately, just having a budget isn’t enough. You need to have a working budget! If you often find yourself reworking your budget, but still are over-budget ever month, you need to know these 6 Reasons Why Your Budget Isn’t Working for You!
6 Reasons Why Your Budget Isn’t Working
1. Your Budget Isn’t Based on Facts
Did you use actual receipts and bills to create the figures your budget is based on? Or did you just Google numbers or guesstimate? Unless your budget is based off concrete numbers, then it’s set up to fail. Finding out how much utilities cost for people on average may not give you a number even close to your actual utilities cost when you move to a new apartment.
And guessing at how much you spent on heat during the winter isn’t half as good as pulling out your bills from last winter and finding out the exact cost. Also, just guessing at your expenses (and income) can lead to you completely forgetting to include some things, which really can mess up your budget! So if you’re wondering why your budget isn’t working for you, it may be because your budget isn’t fact-based!
2. Your Budget Is Idealistic
Maybe you made a budget because you want to cut down your costs in some areas. Maybe you thought, “I know I usually spend $500 a month on groceries, but now I’m just going to spend $200 a month!” It’s great to try to cut down your expenses! But if your budgeted amounts aren’t realistic, then your budget will fail.
Just because someone else is able to do extreme couponing or meal plan and feed a family of 6 organic food on $200 a month doesn’t mean you’ll be able to do the same. You may live in a more expensive state, or may not be able to spend as much time hunting down coupons. When putting your budget together, you need to be realistic about just how much you can cut costs. If necessary, start small. Shave $25 off a category each month until you hit your saving limit.
3. You Haven’t Give Your Budget Enough Time
Possibly another one of the reasons why your budget isn’t working for you is that you simply haven’t given it time to work! In a perfect world, you’d create a good budget and instantly you’d live by the rules of that budget. But the reality is that it often takes time for you to adjust your lifestyle to the constraints of a new budget. If you’re not used to couponing, you may not always remember to bring them with you. If you used to eat out 5 days a week, you may slip up and not make food at home every day. You’re only human, so you need to give yourself time to make mistakes and adjust.
4. Your Budget Doesn’t Include “Fun Money”
If your budget doesn’t have money set aside for fun things, then there’s a high chance it’ll fail! Everyone needs fun in their lives, and not all fun activities are free. Because of this, the best budgets set aside at least a little money for people to have fun. Decide what fun activities are important to you, and see if you can include a little “fun money” to pay for them at least once a month. Maybe you want to be able to go to the movies, or go out with friends. If you don’t budget for those kinds of things you’ll start feeling deprived, and then eventually you’ll give up on your budget because it was too restricting.
MORE RELATED READING:
- How to Create an Easy Money Saving Plan
- 30 Ways to Save a Little Money Every Day
- Unusual Money Saving Tips for Moms
5. You Made Your Budget Complicated
Some people think that the more complex and fancy their budget is, the better it’ll work. But the truth is, a possible reason why your budget isn’t working for you is that you made it too complicated! Maybe you used some complex software that you can barely understand. Or maybe you made a ton of micro-categories, and you micro-managed them. In most cases, a simple budget works best. Start with a basic income vs. expenses budget with only a few categories, then change it and make it more complex if needed.
6. You’re Not Being Honest
It’s also possible that your budget actually would be working, if you were honest! What that means is, if you find yourself purposefully leaving out expenses, or exaggerating your income, then you’re not being honest with your budget. If you lie to yourself when creating your budget, it can’t work the way it’s meant too! If you spent too much, or made less than you expected, be honest with yourself, adjust your budget, and try again next month.
Are any of these reasons why your budgeting isn’t working? How did you fix it?
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