How to Respond When Your Budget Isn’t Working
You may have big ideas in mind about creating your first monthly budget. But when your first budget fails, along with next month’s and the one after, you probably start feeling frustrated. Budgeting is not as easy as it looks from the onset, and small mistakes can leave you feeling stretched thin at the end of a long month – or worse, being forced to use your savings or credit to make ends meet.
If the thought of working out the details of your next month’s budget is already giving you a headache, take a few minutes to think about whether you’ve fallen victim to some of the most common budget blunders listed below.
1. Your budget is too tight
If your existing money management plan is organized so rigid that you can’t even afford a pack of gum by the end of the month, it’s likely that you may have overplanned. Knowing where each penny of your income is going is good. That is until you leave no room for error. Sudden or unexpected costs tend to arise, and failing to leave any room to account for these can actually cost you more in the end. Remember your cousin’s birthday party at the end of the month? Or the spike in fruits and vegetables at your favorite organic grocery store? These might force you to reorganize your plan, so save yourself some time, and free up a little income to plan for the unexpected.
2. You’re on autopilot
As your goals and circumstances change, your budget should change with it. For example, if you pay off your credit card debt one month, the money you would have put toward a payment should not just automatically go into your pocket the next. Instead, look at your budget and find another area to which you can devote this resource. Perhaps you can boost your savings or pay more toward a student loan. Making these types of changes when your circumstances change allows you to optimize your spending.
3. You hate your budget
If you already think that your money management plan is oppressive, it’s unlikely you’ll want to stick with it. However, rebelling against your plan won’t make you any richer or happier. Instead of looking toward your budget as restrictive, consider the benefits and freedom it offers you. It forces you to save for your future, eliminate pesky debt and interest charges and live life on your terms. Carrying out your plan with this mindset can show you just how liberating a budget really is.