Why your Budget Fails?
Almost 60% of the families, especially the new parents’ family face a very common problem i.e. budget failure while managing their personal finance. In this article, I’ll discuss some common reasons of failure while preparing the monthly budget. Take care of these issues and I am sure you’ll get rid of this problem.
1.Being not practical:
One of the main reasons of budget failure is being impractical at times. If you’ve prepared your budget with some imaginary figures, by not doing enough analysis on your previous months’ average bills then your budget will definitely fail.
2.Being too strict:
Your budget may also fail due to its strictness. Suppose, you have prepared a budget with no entertainment option and have promised to yourself to stick to it. Believe me, no one can follow such a budget for more than Two months. After couple of months, on a fine day, you’ll feel too depressed and within a day all your hard works will be at sea.
So, always keep some reasonable entertainment options every week, like- a long drive and taking meal at road side café, Bar-b-que at your garden, picnic at park, visiting to relatives’ house, etc.
3.Heavy usage of credit Cards:
Sometimes we spend going over the credit limit while using credit cards. In this case we usually pay minimum due amount of the bills and live on the credit. Once a year in case of dire need it may be acceptable but making it a habit can be lethal. Because, credit card companies will charge high interest on the non-payment amount and this interest amount will nullify your options to investment that money.
4.Getting addicted to that Sale! :
Yes, this is also one reason of budget failure. You may ask “Why? I am buying on sale and saving a lot, isn’t it?” But is it really so? Is it a necessary or nice to have? The item which are you buying on sale do you need it currently? Do you have any plan to buy these items if the sale was not there?
I know 90% of the time your answer will be “No”. This is the reason 50% on $100 don’t save you $50 but it spend your $50 on unnecessary items.
5.No planning before buying:
Always plan before you buy anything. A list of necessary items will keep you away from impulsive buying, less spending and as a result you’ll be able to stick on your budget.
6.No motivation to stick to budget:
As per me, this is the main reason of budget failure. You don’t know why you are preparing a budget and why you are saving. So, before preparing budget, know your motive. Write down each and every reason of making and following a budget, like- paying off the loan as soon possible, a dream vacation, savings for retirement, etc.
These reasons attached with their monetary value will inspire you to stick on your budget.
7.Not following up regularly:
Sometimes budget fails due to not matching up the actual expenses against their budgeted figures. Yes, this job is tiresome but this is required if you want to continue to follow your budget. Your total monthly budgeted amount may not match with actual expenses, but this checking will help you to figure out where you need to be more careful.
So, what do you think? Is it possible to maintain your budget now? If you are facing any particular problem while following up your budget then don’t forget to mention the problem here. Write down your problem in “comment Box”. Hope, you can get a solution either from me or from your fellow reader friends.