Each new month is a fresh start, and each month life intervenes and ruins your perfectly planned budget! What’s the point of all that effort if it doesn’t work?
I’ve been there, and it’s incredibly frustrating. I would get through the first week okay, my motivation would dwindle the second week, and by the third week, well… let’s just say I was ready to start over. If only the magic money fairy could have been there to solve all my budget woes.
Sorry, I don’t have a magic money fairy, but I have been able to identify three common reasons your budget isn’t working, and more importantly, how to fix it.
The Problem: You’re forgetting to save for irregular expenses.
Vehicle registration, doctor bills, and summer camp fees always come up at the most inconvenient times. Just when you think you have a handle on anticipating everyday expenses, surprise! The car needs new tires.
The Fix: Create a sinking fund (a mini savings fund) for every irregular expense, including annual subscriptions and membership fees, car repairs and tires, annual car registration, Christmas gifts (start saving in January), back-to-school shopping, and anything else you can think of. A brainstorming session may be in order here. Estimate the cost, divide by the number of months that you have to save, and put that amount away each month, either in a physical envelope or in a savings account. For example, if you need $240 for car registration, you need to save $20 a month for the 12 months leading up to the registration renewal.
The Problem: Your budget is collecting dust.
I will be the first to confess that I am guilty of doing this! I used to write out a budget, set it on my desk, and let it collect dust the rest of the month. Friends, this is not a budget.
The Fix: Think of the word “budget” as a verb, not as a noun. Record your purchases daily, not monthly or even weekly (you will forget or lose receipts, and it’s a pain to go through a week’s worth of purchases—been there, done that). Your budget is there to guide you and keep you on track. It can only be effective to the degree that you are using it.
The Problem: You don’t know how much things cost.
When you first start budgeting, a lot of categories will be guestimates. It is hard to know how much you spend on groceries, gas, and clothing, unless you are willing to comb through several months of bank and credit card statements to figure out the averages. Even then, you might be trying to spend less, and you don’t know what is realistic.
The Fix: Give yourself time to refine the numbers. The first two to three months can be rocky. The trick is to keep in mind that budgeting is a process, and that you will get better the longer you practice. Budget sessions used to take me two hours and required several editing sessions. Now it takes my husband and me 30 minutes, and we are pretty much spot on. I never thought we’d get to this point, but now that we have, I am so glad we stayed with it.
Don’t give up on your budget. You may be forgetting to include irregular expenses, need to develop the habit of recording expenses more often, or need to refine the numbers some more. Remember that improving your budgeting skills is a process that takes time. Stick with it and your efforts will pay off!
Where are you having difficulty in your budget? Comment below or email your questions to firstname.lastname@example.org.