Having and using a budget is necessary if you want to pay off your debt and to live within your means. However, many of us find that our budgets just don’t work because we find that the numbers don’t match up or that we always manage to spend more than what we budgeted for. There is a number of reasons as to why your budget might not work, which we will take a look at and how you are able to get your budget back on track.
This will help you with any debt that you are trying to pay off or just give you better management over your money.
Reasons Your Budget Might Not Be Working
Budgets Take Time
Your budget will not just automatically work and it can take a few months as you start to adjust to your new budget with your actual income and expenses. You need to give it time as you change your living habits to fall in line with your budget. You should carry on working with it and adjust your budget as you need to.
Spending More Than You Earn
If your net income minus your expenses is a negative number, then you are spending more money then you have coming in. The problem is then not the budget, but your spending. You will need to go through your budget, see what you spend your money on and make cutbacks.
This can be difficult to do, but in order to be in a better financial situation, you will need to learn how to live within your means.
Some Things Cost More
It is easy to underestimate how much you will spend on certain things like food and petrol. If you find that you are always overspending in these areas, then you will need to increase your budget in these areas. This might mean that you will need to make cutbacks in other areas.
It Only Works If You Use It
If you want your budget to work, then you will need to use it. There is no point in creating a budget, putting it away and then forgetting about it. Throughout the month, you should refer to your budget, track your spending and compare it to what you have budgeted for, so you can see how you are doing.
Wait…keep reading…there are more reasons why your budget might not work…
What About Fun?
Just because you are on a budget, it doesn’t mean that you can’t have fun. If there are certain things that you love to do, then just make sure you have applied a specific amount to these in your budget. Your budget should be reasonable, so you can still have fun but without blowing your budget.
Change It, Adjust It and It Will Work
Your budget isn’t set in stone. You should actually adjust your budget every now and then. If your income and expenses change then your budget will need to reflect this. Also, major life changes like marriage, having a child etc., will also require changes to your budget.
When you are sticking to a budget, unplanned purchases may require you to say no. You may have to put a purchase off, until you have checked your budget to see if you are able to afford it. You are able to delay some purchases until you have saved up for them.
Cheating On Your Budget?
It is possible to cheat on your budget by saying you earn more than you actually do or you say that you spend less than what you really do. Not sticking to your budget and not being truthful can have consequences like more debt or you may find that you have to go into your savings to pay for your regular bills.
Every Expense Counts
If you do not include every expense into your budget, then it may seem that it is not working when you compare your spending to your income. You need to capture every expense that you have. You can track them via online banking, ATM receipts etc.
Are All Bills Monthly?
There are some bills that are only due once a year. If you don’t include these in your budget, then they will take you by surprise. The best thing to do is to determine the monthly amount for these yearly expenses and put money away for these during the year, so that you don’t get a shock and blow your budget.
An Emergency Fund Is A Must
Having an emergency fund is a must as this will stop you from having to pay out of pocket for unexpected expenses. You can start an emergency fund by putting some money away each month until you have reached at least 3 to 6 months of your living expenses.
Budgeting only works when you are truthful, keep a record of all your expenses, make cutbacks when you need to and adjust as you go through the month. This will help you to live within your means, but can also help with debt that you need to pay.