Are you hiding from your budget?
You’ve gone to the trouble of creating a financial plan for you or your family, but you’ve thrown it out in exasperation. It just doesn’t work! Why even bother?
Your budget may have failed you for one of these (fixable!) reasons:
You’ve got the wrong attitude.
Ask someone who’s successfully lost a lot of weight how she did it. You’ll likely hear that she didn’t diet . . . she changed her lifestyle.
Living (happily!) with a budget means adopting the same attitude. You are not depriving yourself. You are choosing to live a certain type of life.
Like healthy diets, budgets can benefit you during those tight financial times but also during seasons of abundance in your life. You consciously plan your time to coincide with your life goals. Why not consciously plan how you spend and save to achieve your financial goals?
Instead of seeing your budget as restrictive, consider it an invaluable tool to success!
You’re missing something.
Your budget is not going to work if you’ve inadvertently left gaping holes in it.
There are so many things that we spend money on without thinking or by automating. It’s easy to forget expenses that add up or even sources of income (like interest from your bank, dividends, or credit card cash back).
Before you etch your budget in stone, make sure that you’ve done a thorough review of your cash flow so that you’re confident you haven’t missed anything. (Check out The Ultimate Budget Workbook, which saves you the hassle of starting from scratch!)
You have no wiggle room.
Your planned budget will work great . . . as long as absolutely nothing goes wrong. If a heat wave unexpectedly pushes up your air conditioning costs or you get hit with some surprise medical bills, you’re toast.
Give yourself a buffer in your finances, especially when times are tough. Sock away extra savings that you might need. Plan for a reasonable amount of variability in your food and utility bills. Anticipate a possible increase in your insurance rates.
You have an unrealistic budget.
Don’t idealize your financial plan. Just as you have to let yourself have a piece of cake every once in a while to stay sane on a diet, don’t assume that you will live a perfect financial life.
Unless you have reason to think it’s possible, you shouldn’t plan to feed your family of four on $50 a week — particularly if your current lifestyle includes eating out on a regular basis! You shouldn’t assume that the stock market will give you a 12% return this year or that you won’t spend a dime on clothes.
Budget for reality.