Knowing how to stick to a budget is simple... on paper. When real life happens, however, things get complicated. For example, no one puts "speeding ticket" as a line-item on the anticipated expenditures for the upcoming month. And no one expects the dog to need an emergency visit to the vet - these things simply happen.
The trick is not to ditch the budget, but to prepare early for surprising budget busters. Here are the most common reasons even the most well-crafted budgets go off course.
#1. Impulse buys. Most people start a budget with the noblest of intentions. They believe that with the proper level of determination and grit, they can keep more of their paycheck in the bank. The truth is, self-control will only get you so far with a budget. The tendency is to over-restrict your spending at first, and when it gets difficult to stick to the plan, folks ditch the whole thing and revert to old bad habits.
Avoid this common pitfall by committing to a lenient budget - at first. Allow yourself an entertainment category, plus a "whatever I want" line item so your new spending plan feels more like freedom than chains.
#2. Occasional expenses. Enrolling your kid in a new activity? Registration fee. Time to renew the gym membership? Administrative charges. Car Insurance, real estate taxes, trash service and birthdays can all be considered occasional. They're surprising, even though you might have them on the calendar.
To circumvent these yearly expenses, simply add a line item into each monthly budget of 1/12th of how much the total is. For example, the Department of Motor Vehicles reports that the average American's yearly car insurance cost is $900 every 12 months. If that's your premium, set aside a cool $75 each month to pay that bill in cash (comfortably) when it comes due.
#3. Convenience food. Drive-through and take-out meals are expenses that often derail the budget. Stopping for a quick bite when you're late doesn't necessarily mean you're impulsive. In fact, it could cost you less in the long run if your boss expects you to be on time. The habit can add up, though, and halt your budgeting progress.
Avoid the pitfall of purchasing convenience food by packing your lunch the night before.
#4. Time and energy cost. One of the biggest budget-busters isn't a financial expense at all - it's the sheer difficulty ("cost") of being consistent over time with tracking and recording transactions.
Reviewing your budget each day only takes a minute or two, but even that is hard to sacrifice when so many things are vying for your attention. Kids, work, relationships, daily duties and hobbies are enough to deter you from investing time in a budget, especially when it doesn't hurt too much to skip a day. But one day turns into two, and before you know it, you haven't tracked your spending for a whole week.
A creative solution to this issue is to set a timer every evening to tag and categorize each transaction from the day.
#5. Lack of purpose. Another non-monetary budget buster is the vague desire to be financially free. Knowing exactly why you're budgeting is just as important as knowing how to stick to a budget. If your financial goals are not specific, then the motivation to keep your commitment will wane quickly, and you'll be surprised to find your spending plan on life support. Or worse.
Combat this tendency by writing specific goals, both long-term and short-, on your budget. Include a picture or inspirational quote in the margins, if you're so inclined.
#6. Emergencies. Unfortunately, emergencies are part of life, and all too often, they derail the budget. Medical issues, car collisions, house repairs, and veterinary bills are not typically things you expect to happen – but you should.
Plan early by treating these like periodic expenses (see #2), and you'll be ready to absorb the events when they pop up.
If you want to know how to stick to a budget, the solution is not more militant self-control. Instead, it's having alternatives in place for when life throws you a curve ball.
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