Budgeting is the key to achieving your monetary goals, such as paying all your debt off, buying a car, or retiring early. In other words, having a budget is essential for your financial success. But sometimes, after you start doing it, you might face some struggles. But don’t give up just yet – here are some reasons why your budget isn’t working and how you can fix them:
1) You Spend More Than You Earn
Want to figure out if you spend more than you earn? It’s pretty simple. All you need to do is subtract your expenses from your income, and that number is negative, it means you’re overspending. This could lead you to a big spiral of debt. If that’s your case, the first step is figuring out areas you can cut off expenses and/or get a second stream of income or a higher paying job.
2) You Haven’t Given It Time
Have you ever tried budgeting for a week or a few days with no results? You might not have given it enough time. Budgets are long term commitments, and new habits tend to take at least 30 days to form. So don’t be too hard on yourself if you fail on the first days. Start over and understand what you can change for it to work.
3) You’re Not Committing to It
Sticking to a budget will require self-discipline and saying no to impulse purchases and other unplanned expenses. However, it’s easier said than done, but it’s not unachievable if you make some effort in the beginning. It doesn’t mean that you can’t buy whatever you want, it just means that you’ll get it later when you can afford it.
4) You Don’t Have Goals for Your Money
If you’re saving for just the sake of saving, there’s a big chance you won’t have the motivation to keep budgeting in the long run. Think of what you want to buy in the future and create short, medium, and long-term achievable goals for your money according to your income.
5) You Aren’t Adjusting It Along the Way
Your budget isn’t supposed to be a fixed thing that can never be changed. You might get a new job with a different salary, have new expenses, get married, etc. So it’s very important to keep track of your budget over time and make changes as you deem necessary.
6) You Didn’t Leave Room For Entertainment
There is a big chance that if your budget is too rigid, you will never commit to it. Moreover, everyone needs to unwind every once in a while, so you should assign fun time in your budget as well.
You might be wondering, how much money should you assign for entertainment? It depends on your lifestyle and what budget you want to follow. For example, the 50/30/20 budget rule states that you should spend 30% of your income on your wants, such as hobbies, shopping, restaurants, etc.
7) You Don’t Know Your Spending Triggers
Finding out what makes you want to spend money is crucial if you want to change your bad spending patterns. For instance, do you go to the store when you’re under the weather for some retail therapy? Do you window shop online after feeling bored and end up buying something you didn’t need? Being aware of your triggers is crucial so that you can change your focus to something else instead of shopping.
8) You Forget to Celebrate Small Victories
Celebrating small achievements such as sticking to your budget for the whole week or the whole month can make you want to keep doing it in the long run. Indulge yourself in something that won’t break the bank, and that will make you happy such as takeout food, binge-watching your favorite shows, buying something small for yourself, or anything else you want that will keep you motivated.