You may have thought that budgeting just isn't for you. But the truth is, budgeting is for everyone--at least the ones who want to win with their money! Here are 5 possible reasons yours hasn't worked so far.
You're not accounting for every dollar
For a personal budget to be successful, it should be “zero-based”, meaning you spend every single dollar on paper before the pay period or month begins. Maybe you got a gift of $25 from grandma for your birthday or you made some money on a side hustle. If you didn’t put that money into your budget under “income”, it likely sat in your bank account or wallet and got lost in that 5th evening out to dinner or in a couple visits to the vending machine at work. Am I talking to my past self? Yes, yes I am.
You haven't factored in automated bill pay
You did great this month! Said “no” to a couple dinners out so you can save a little and reach some goals. Then you get to the end of the month thinking you should have $100 left over, but instead have $75. Uh Oh! Culprits were Netflix and Amazon Prime monthly. Have you taken the time to sit down and pore over your checking account to see all the payments for subscriptions, bills, streaming services, and charity sponsorships that get taken out automatically each month? Even the most frugal spender may find in the first month of budgeting, that there were one or two payments that came through that they forgot to account for. Take note of each company with auto-pay scheduled. When you have time, determine what day of the month they leave your account and consider syncing them to happen right after your paycheck comes so you don’t run the risk of spending that money before the bill in question gets drafted.
Your spouse isn't on-board or doesn't know about it
Money fights are among the top two reasons for divorce. Could budget miscommunication be one of those fights? You betcha!
[Spouse A: spends an hour crafting a beautiful spreadsheet with formulas built in, and shares it with Spouse B.
Spouse B: the more spontaneous variety of individual who just wants to live their life. Sees budget, says “Cool! Great Job!”, and continues spending in whatever way they choose.]
Problem with this scenario? Spouse B did not have anything to do with building this budget, so why would they follow it? Spouse A didn’t ask for Spouse B’s input! If you are among those of us with a nerdier disposition—a.k.a. you are Spouse A—invite your spouse to give 10-15 minutes with you. Go over that budget together and ask your spouse to change at least one thing. When he/she does, it forces you to make conversation and work as a team. Make it a pleasant experience, not a boring condescending lecture. Make sure kids are in bed and not tugging at your pants or your nerves. Bake some cookies. Good feelings. Caaaaaalm feelings….
Another aspect of working as a team is ongoing expense-tracking throughout the month or pay-period. Don’t want to collect receipts from your spouse? Neither did I. He’d forget to acquire one at the gas station or pitched into a family-style meal with friends. Or it would fall into a pocket and get washed, never to be seen again. Instead, find an app that syncs. There are so many resources out there for budget syncing, but EveryDollar and Google Sheets with a pre-built spreadsheet are my favorites.
You aren't using a clear, organized format
Does your budget look like this?
Lots of us may work best getting our ideas out fast and loose onto the paper. However, no one likes to look at a jumble of scratch-outs, excessive line items, or an entire category named "Target”.
Start your basic budget with looking at any and all income you receive each month. If you’re married, include both of your incomes! Notate that total amount to the right side. Chart out your fixed expenses moving down through the following categories:
· Giving
· Saving (including what you are investing)
· Home
· Food
· Transportation
· Clothing
· Childcare
· Medical/Health
· Lifestyle
· Debt (if any)
· Miscellaneous
Finish off by then charting out the variable expenses, or things that are not paid exactly the same monthly, like groceries, clothing, and gas.
I do believe it does someone good to list these things out at least once on paper. But transfer that information to your budget app on the computer, tablet or phone! Again, I recommend https://www.everydollar.com/ or https://www.google.com/sheets/about/ for staying on top of your expenses throughout the month. I’m including a pre-filled (formulas included) budget that I adapted years ago from one created by Enemy of Debt. Here’s my adaptation: Sample Budget Format.
You haven’t followed the plan
And therein lies the rub. Whenever there are days between you charting a goal and having to execute it, there WILL be either temptation to veer from it or forgetfulness. And, well, there are 30 days in each month on average. Did you get motivated to sit down and write up a budget on Sunday, accounting for the fact that you had enough money for about 2 dinners out per week, and then get to Saturday only to realize you ate out 4 times?? Sometimes a budget doesn’t work, simply because you forgot to tell yourself “no” at some point. Figure out where you should be in your financial life and make a plan to get there. Then Follow. The. Plan. Otherwise, don’t expect noteworthy results. Personal finance guru Dave Ramsey says “Children do what feels good [in the moment]. Adults devise a plan and follow it.” If you need help in this area, seek out a financial coach. This is a person who can help you make a realistic plan, motivate you to follow it, and educate you on your options along the way.
Comments