Having a budget in place is the key to living a financially stable life that is debt-free. However, most of us might religiously have a budget every month but at the end of it all, the budget is not working and we always end up broke and more in debt. The numbers don’t always add up and in most cases, you happen to spend more than the figures on your budget list.
However, knowing what is causing this might be the beginning of the solution, and you will avoid spending want you don’t have and being broke every month. The common reasons why you never stick to your budget and end up broke are as follows:
You Are Spending A Lot
If you have a budget deficit that is one clear sign that you are spending too much. You are most likely spending more money than you are making. However, all is not lost begin by taking note of only the essentials and be real in your analysis of what is important and what is not. Cut off all the unnecessary expenses that you can do without. If your net income becomes a negative number after you have subtracted all the expenses then chances are you are living beyond your means and the problem is not the budget at all. The problem here is your spending and there is something you can do about it. Purpose to spend money only on basic needs. Begin by doing it for only one month and you will realize how much you can save. Resist the urge to be an uncle Sam and avoid a budget deficit which will always force you to borrow.
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You Don’t Have A Budget List
The budget might be existing, but does it exist on paper? Do you have an actual list? You have to have an actual list of your budget, the same way you have a shopping list to guide you on what to buy. Having one will help you know the priority things to cater for. Make sure the list is made up of only the necessary expenses. Besides, writing it down will help you reference it and see the progress you have made and how far you have come in terms of your spending habits.
Not Enough Money For Some Things In Your Budget
You are probably underestimating the amount of money you will spend on some categories. Things like food, gas or some bills might be more than you estimate them to be. If you realize that you are overspending in those areas then it is only right that you increase the budget for some categories. This means cutting back on your spending in other areas to achieve balance and avoid a deficit.
You Lack Budget Discipline
Another reason why you never stick to your budget is that you lack the discipline to do so. What you do is religiously write a budget and never refer to it. You write it and immediately put it in a drawer where you forget about it. What you need to do is refer to your budget throughout the month as you spend money on various expenses. Say a firm no to any unnecessary expenses even though you would love to buy Track your spending closely and compare with what you have budgeted to see how you are faring on. It is not that your income is little, it is because you simply haven’t learned how to follow your budget. Perhaps you still haven’t seen the importance of strictly following it. After many harrowing financial predicaments, it should be clear eventually.
No Room For Fun
When you make your budget you didn’t leave any room for fun and this makes you resent budgeting. This is where it reaches that time of the month and you crave fun and decide, to hell with the budget! Then you go on a spending spree of either shopping or fun times at entertainment spots within your location. Leave room for fun in your budget. Decide how much you are going to spend on fun and entertainment. You can still have fun without putting a serious dent on your budget, just decide how much this fun is going to cost beforehand.
You Don’t Adjust Your Budget.
The moment you realize that your budget is not a legally binding document you will frequently adjust it. From time to time adjust your budget but not just so you can spend more. Adjust only when your income or expenses change. Ensure that your budget reflects the changes. Situations like a birth, divorce, marriage or promotion with more income might require a budget adjustment. As you make your budget adjustments, do so wisely. If you don’t make any budget adjustments, then you will have a budget that doesn’t work and in the end, you will overspend and become broke before the next paycheck comes in.
You Cheat On Your Budget
We don’t only cheat on our partners but we cheat on our budgets too. You might have overstated your income or understated your expenses. You might never get caught literally when you cheat on your budget but you will still face the consequences. You will find yourself not following your actual budget, broke and up to your eyeballs in debt. Another scenario would be having to take your savings and use them to pay your regular bills.
Forgetting To List Some Expenses
Sometime you could forget to list a certain expense(s) in your budget list. You will then realize that you have a deficit when you find yourself confronted with a deficit. Remember all your expenses and list them in the budget to prevent experiencing a deficit.
You Lack An Emergency Fund In Your Budget
The lack of an emergency fund is what results in many income earners failing to stick to a budget and getting into debt. Set up an emergency fund of a few hundred dollars every month until you finally have a solid emergency fund that will cater for three to six months of expenses. This way, any emergencies that arise will never affect your budget.
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Finally, don’t beat yourself up when you can’t strictly follow your budget. You might not stick to it in the first few months but with time you can adjust it to be perfectly in tune with your income and expenses. Don’t throw in the towel soon, just keep adjusting the numbers and incurring only the necessary expenses. When you remain persistent, you might eventually be rewarded by a debt-free and less broke life, thriving in a difficult economy.