By April Lewis-Parks
Today, I decided to write about what I have been hearing from many of our readers… they set a budget, but it just keeps getting blown…
You finally decided to take control of your finances to save more money and kick your debt to the curb. You’ve done everything right. You created a budget, tracked all your expenses, and even given up your morning Starbucks addiction in favor of home brewed coffee. So why is your savings account still bare and your credit card balance still high? It could be several reasons.
When budgets fail, many people do not understand what they did wrong. Monthly money management plans are an effective way to organize your finances and start making better spending decisions, but there are several factors in a successful budget, and if you are unaware of what makes a budget effective and efficient, you may be making some of the most common mistakes below.
1. Your budget is unrealistic
Planning every expense down to the last penny sounds feasible, but this is the one of the fastest ways to wreck your spending plan. There will almost always be other costs that pop up each month that you failed to plan for, ranging from birthdays and anniversaries to a higher electric bill of credit card charge. For these reasons, it’s important that you leave some wiggle room in your budget to account for these changes. Otherwise, you may find yourself pulling out the credit card or dipping into savings to cover these costs.
2. You don’t have a goal
Budgets should be designed with a particular goal or goals in mind. This may include saving more money, eliminating credit card debt or a student loan balance or even putting aside money for a vacation. Having goals in mind can help you organize your monthly finances around these goals and know how to best allocate your resources.
3. You have given up too soon
It can take a great deal of time to break your spending habits and get accustomed to a more disciplined money management plan. In the interim, you may fail to abide closely to your budget, which can lead to warped results. This can create negative feelings about your money plan when you don’t see the results you expected or you are not accomplishing your goals quickly. However, this is the time to stick it out instead of giving up. Visualize your goals or post reminders around your home to help you stay patient until you start seeing results. This may give you the additional motivation you need to adhere to your plan.
The important thing to remember is too never give up! You deserve to be in control of your money and have your goals reached.