When many people hear the word, budget, they immediately think of restraints and something only poor people would use. The thought of putting limits on what you can spend sounds terrible and as if you have financial issues. That could be a reason, however it is more for spending your money wisely and in the most efficient manner. This can be a big factor in why most budgets fail.
A budget is a plan for the amount of money needed for cost of living or other specific goals. It’s a way to plan ahead for what to do with your money and the best way to spend it. You may want to buy a house soon or figure out the maximum amount you can contribute towards retirement. That can all be done with a budget. A budget takes into account all incoming money, your fixed costs and anything in between.
There are countless different ways to budget your money, but finding the best one will depend on your needs and preferences. I’ve played with countless and spend my time creating budgets for fun, because I’m Mister Budget. I love creating different options on where to place every dollar and plan ahead for several scenarios. In other words, I have no life.
Creating a budget for each month is the typical way to go, opposed to weekly or even annually. This allows you to get the best picture of your current financial situation. Reviewing it weekly is great to account for any unforeseen situations and adjust it accordingly. Annually is too broad, but always good to do as a measure of comparing previous years’ performance. You know, for fun!
The purpose is to use this as a means of creating structure and accomplishing your goals. Most people struggle living paycheck to paycheck. A budget can be seen as an escape from this and let you live a life to its fullest. No more worrying about overdraft fees or bounced checks.
So, if it’s so wonderful, why do most of them fail? Why is achieving peace of mind and learning to live the life we want so hard to earn? Budgets are the answer, but they never seem to stick. We may be all in one month, but the next, something goes wrong and we walk away from it. No patience to adapt or push through the unknown and hold onto that budget.
I Failed at Budgeting
I’ve mentioned I live for budgets. I live for spreadsheets and all things Excel. I made spreadsheets outlining my next 10 years, creating different tabs to account for different scenarios. I had several different budgets made to include my then girlfriend, a potential raise and other different factors. I had all these spreadsheets and I didn’t follow a single one.
Yes, Mister Budget couldn’t stick to a budget and was in debt up to his eyeballs. I had more bills than I earned and was in a dead-end job. I basically just gave up and decided to ride this wave of anxiety and overbearing darkness. I wore a smile that hid the constant worry of being stuck where I am. I questioned if I would ever reach that better life I had always envisioned.
It took years to find both a budget and the motivation to get me out of that hole. I had finally found my path to a better future. No debt, saving for a house and a happy life. I worked hard to increase my credit score over 120 points and I’m not done yet. My monthly income is budgeted to pay all my bills, save for a house and a little extra as a cushion for next month.
Why Budgets Fail
One of the main reasons budgets fail, especially for me, were the unknown factors. These are the scenarios we don’t or can’t plan for. An unplanned trip, a forgotten bill, a “moment of weakness” purchase or some other expense we made. These situations can throw off your entire budget for the month if not year and make you give up early.
I once went too aggressive with my debt repayment plan, and had to rely on my other credit cards to pick up the slack. It was counter-intuitive and only led to increasing my debt further.
Instead, we should stick to the budget, but make space for mistakes and unprecedented expenses. I would recommend either putting a certain percentage aside each month as a buffer, in addition to your emergency fund, or work to get a paycheck ahead. All would help, but also sound ridiculous and impossible, especially if you are living paycheck to paycheck. This is normally where I had left and unsubscribed to that plan.
I had to learn to be flexible and react to these situations. This past year I decided to be realistic with budgeting and accept there will be months my wife and I totally screw up our budget. So far we have remained focus, because we want to get out of this apartment so bad, which has acted as the fuel to the fire to motivate us.
Another reason for failing to stick to a budget is our impatience and need to immediate gratification. We expect changes to happen overnight, when in reality it could take months to even to start to see those gradual changes. Getting back on track is a slow process. It can be extremely stressful and disheartening at times, but in the long run it’s necessary and totally worth it.
I carried around so much debt all these years to now be completely free of those shackles. It took a long time and so many failed attempts at succeeding. This journey was so worth it and my wife and I agree we never want to be in that position again. Any credit card purchase we make these days is paid off the next pay cycle and only used mostly to get the points.
If we can learn to adapt to the unknown and plan for those unforeseen or forgotten expenses each month and stick to the budget, we can succeed. There are countless types of budgets that I will be writing about in the future, but if I could leave you with just one piece of advice is to find that motivation to keep going. It can be a stressful process but if you have that spark to keep you moving, you’ll succeed. It won’t be a success overnight, but if you remain patient and stay dedicated to sticking to your budget it will eventually become habit and lead to a better and more fulfilling life.
