6 Reasons Your Budget Stinks (and What to Do About It)
One of the best things about the budget? It’s math.
Math haters and Free Spirits, keep reading!
Math is black and white. There’s no gray area.
You want to know why you’re spending $400 more than you make every month? It’s all there in the numbers. You just have to take a little time to think through it.
The problem comes when people start budgeting, make some mistakes, then give up. That’s not a good way to deal with money management issues. The problem won’t magically disappear.
So, in the spirit of helping you stay on top of your money situation, we’ve identified some of the issues you might have with budgeting and how to remedy each one.
1. You Don’t Budget
This isn’t rocket science, and we’re not trying to play some voodoo trick on you. It’s just that, well, your budget might stink because you don’t have a written, zero-based budget in the first place. So that’s where you’ve got to start.
2. You and Your Spouse Aren’t on the Same Page
If you think car loans and adjustable rate mortgages are perfectly fine but your spouse feels otherwise, then your relationship will have problems. There’s no way you can manage your money well when the two people who control the budget completely disagree on basic ways to spend their income. Listen to each other and come up with a plan that works for both of you.
3. You Pick a Number, Any Number
Ever done this? Maybe you’re not sure what the food budget should be for the month. You think about it for about four seconds and decide that $500 sounds like a good number. Why? Five hundred is your favorite number. Or you’ve got 500 days until your wedding. Or you once won $500 in a raffle. These are not good ways to determine the amount in your budgeting categories. Instead, be intentional. Look at how much you’ve spent in each budget category over the last few months and come up with a reasonable number to set a baseline to work from going forward.
4. You Aren’t Realistic
Maybe you don’t have a problem with randomly assigning numbers to your budget, and you do actually sit down and think about how much money you should allot for each category. But if you repeatedly underestimate or overestimate how much goes in each category, then you aren’t being realistic. Sorry, but $100 a month on food isn’t going to cut it for a family of five. Or $400 a month on shoes? On shoes? Come on!
5. Your Priorities Are All Jacked Up
Break it down to the basics. What do you really need? After that, if you have any money left over, you can start focusing on wants. It’s pretty simple. Needs go first. Wants go second. Keep that in mind when you start the monthly budget. Electricity and food are needs, so they get added at the top of the budget. A new dining room table is a want. You can save for it using what’s left after the bills are paid. Just be sure to add a line item in the budget and tell the money where to go!
Don’t freak out when things aren’t going as smoothly as you would like. It usually takes a few months to get in the flow of making a solid, dependable budget.
Stay consistent and focused, and you will begin to see a difference in both your attitude and your bank account.