Is sticking to your budget a big problem for you? Perhaps you are plagued by one or more of the common reasons why a budget is not working for you. Good news is, there’s a way to fix them.
1. Looking for Perfection
You want to create the perfect budget that will work for you personally so you keep crunching numbers; unable to decide what percentage to allocate for which category in your budget. Overthinking leads to analysis-paralysis hindering you from making any progress towards a solution because you keep going over the flaws in your budget system.
The Fix: Just create a budget and stick to it for a set duration. Don’t try to think of a permanent solution. Think of your budget as a work in progress and adjust it along the way as you learn more about your spending habits. Remember that it’s a system and it may have bugs at the start; so testing it in actual practice is the best way to achieve your ideal budget system. It might help to learn more about your money personality and make your budget accordingly.
2. Thinking It’s Too Complicated
Keeping track of your spending doesn’t have to be complicated. There are many applications on your computer or mobile device that you can use. You do need to test which one is the right fit for you and your lifestyle. But you really don’t want to test all of them do you?
The Fix: Keep it simple by going back to the basics. A pen and notebook is always handy so you can immediately jot down any expense you may have. This way, it will be easier for you to identify your money leaks. If you have to use an application, keep it as a back-up or a secondary method to monitor your expenses.
3. Indulging in Online Shopping
Online shopping is one of the easiest way to ruin your budget. All the sale items give you the illusion that you are buying them for cheap so you tell yourself that you can go over budget this time and just spend less on your next salary. But since you’re not paying in cash immediately or you’re paying via credit card, you don’t really feel how much it takes out from your budget.
The Fix: Always consult your budget. If it’s not in your budget, consider saving up for it. If it’s on sale, ask yourself if you really need it. Another solution is to take a break from your computer for awhile and think about it. You may realize that you can make do without it. Being aware of your spending helps you better stick to your budget.
4. You’re Good at Giving
Generosity is a good virtue but it is also most often abused. There are a lot of people who are frugal and are able to stick to a budget for their personal expenses but when it comes to their family and friends, they are unable to say no. This is especially true when it comes to giving gifts during birthdays for example, or when monetary assistance is requested by a relative or friend.
The Fix: Put “giving” in your budget. This way, you are still able to give them gifts or provide them monetary assistance and still stay within your budget.
5. Unexpected Events
Life happens and most of them are not in our budget. A medical expense, a job loss, a sudden change of residence, etc. Most people create a budget based on what they experience on a daily basis. They only see what’s currently in front of them and fail to plan for life’s unexpected surprises.
The Fix: Accommodate the unexpected in your budget. When creating your budget, make sure to include items such as quarterly and annual expenses. Also include in your budget a fund where you can stash a portion of your income for use during special occasions and emergencies.
We hope you are able to keep to your budgeting system with these helpful tips. There’s no right or wrong way to start your budget as long as you commit to following the system and tweaking it along the way. You might want to try out the money jar budgeting system and see if it works for you.
Updated. First revised on Pinoy Smart Living on 04.30.2019.
Feature Image: Original Photo by Kelly Sikkema on Unsplash.