9 reasons why budgets fail
Leave My Latte Alone!
by Shaunna Privratsky
A Beginner's Guide to Budgeting Success
Make Budgeting Easier with Financial Software
All the financial experts seem to agree that one of the easiest ways to cut spending is to forgo your daily lattes. Yet, what if this one piece of advice held back many people who would like to begin a budget, but remain reluctant to give up life's little luxuries?
Budget. The very word often produces a shudder. There are many reasons why budgets fail. Here are just a few reasons why budgets fail, and some ways to overcome them.
- The Ostrich Syndrome - If your budget is too vague, you are just burying your head in the sand. Instead, use realistic figures by keeping a spending journal.
- The Gung-Ho Backfire - You set up a strict budget and then wonder why you can't stick to it. By trying to cut spending too drastically, you create an unsustainable budget that is sure to buckle under pressure.
- Greener Grass - If you have trouble resisting temptation, cut it out by changing your habits. Quit going to the Mall to window shop. Stop reading the enticing ads of all the sales you are missing. Avoid online shopping sites if they are your weakness.
- Deprivation Dilemma - You decide to cut out all entertainment. After a month or two goes by, the everyday drudgery of pinching every penny suddenly becomes unbearable. You go on a crazy spending spree, erasing all your hard work in just a few hours. Instead, work some fun into the budget. Look for cheaper alternatives like movie matinees, a free concert, a lecture by a renowned speaker, or just a simple picnic by the river.
- What Does It Matter, Anyway? - Before committing to a budget, you should examine your motives. Do you want to get out of debt? Instead of focusing on the negative and feeling overwhelmed, envision what your life will be like when the debt is paid off. You'll be able to afford that dream vacation, or put money down on a house. Concentrate on the reward to make the budget easier to achieve.
- Living on the Float - So what if I have to put all my groceries on my credit cards? I can still pay the minimums. If you are spending more than you earn, you are living beyond your means. It may work for awhile, but anything could happen to sink your ship. The credit card company might raise the interest rate, increase the minimums, or you could lose your income. Your "cushion" is suddenly gone.
- The Hassle Holdback - Sure, it might be a lot of work to set up a budget. You have to track your spending, figure out your income to expenses ratio, create a workable spending plan to meet your goals, and keep it up. Some people think it's too much hassle. How much hassle would it be if you lost your house? Or you couldn't cash in on that once-in-a-lifetime opportunity, because you weren't sure of your finances?
- No Freedom - A budget restricts me from spending what I want. Instead, I'll just spend until the money is gone, and then get a payday loan to tide me over. Spending without a budget may seem like freedom, but if your finances are out of whack, sooner or later your habits will have to halt. Creating a budget that works for you will allow you to know exactly how much you can spend and still meet your financial goals.
- Why Make a Budget, Anyway? - Nothing will ever change; I'll always be in debt. A budget won't work if you don't have goals. By working towards a goal, you give yourself hope that your future will be brighter. Something that seems impossible can be accomplished with a budget.
So, is it possible to create a budget, without cutting out your cherished coffee? Of course! It is all about making a spending plan that works for you. By fitting treats into the budget, you will get your little luxury and get control of your finances, too. Now you have no more excuses; let's set up your new budget. I'll buy you a latte.
Shaunna Privratsky is an expert in personal finance. Between writing, reading and gardening, she is always on the lookout for bargains. Please sign up for the free newsletters at The Discount Diva. You can also visit Shaunna on Google+.
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