The following is a guest post from my good friend, Allison from Frugal on the Prairie. Please welcome her to the blog today.
Budgeting isn’t always easy. Sometimes we feel like we are on top of our game, saving money and cooking budget-friendly meals. Other times, life gets chaotic and we find ourselves eating out every night and spending much more than we planned.
I recently wrote a book called The Beginner’s Guide to Budgeting so I’ve done a lot of research and personal testing on the topic! If you’ve ever wondered why your finances may be failing, look for these five ways you may be sabotaging your budget.
You’re Not Keeping Track of Every Expense
Budgeting is just the first step to successful finances. It takes much more than simply writing everything down and hoping it all goes according to plan.
If you constantly wonder how you could be under budget on paper but over budget in life, it’s time to look at how you track your spending. Expenses like daily coffees and unplanned Walmart purchases quickly add up and can send daily costs into overdrive.
- Make a list before you shop and stick to it…every single time.
- Check your bank and credit card accounts daily.
- Sign up for spending notifications on your bank or credit card accounts.
- Use a budget or personal finance app for tracking expenses on your smartphone.
- Wait 24 hours before purchasing any non-routine items, such as a new book or pair of shoes.
You Have No Purpose
Let’s get one thing straight- successful budgeting is not simply writing your income and expenses down or just making sure your bills get paid. Successful budgeting is when you manipulate your finances in order to achieve some type of goal.
What are your financial goals? How much do you want in your savings account? How much debt do you need to pay off?
Your budgeting purpose should include how much you’re making, saving, spending, when you’re spending, how you’re spending it, and so on. Specificity is not overrated!
- Begin creating a clear purpose for your budget by filling in the blanks.
- My total income from ___ is ____.__, paid on the ___ every ___
- My total expenses are ___
- Here is a list of all my expenses and their due dates: […]
- I currently save $ ___.__ every month
- I would like to have $___.__ in savings by ___, 20[__]
- My current financial goal is to [pay off my credit card balance, etc.] of $____.__ by ___, 20[__]
- I would also like to [increase income, decrease my grocery budget, etc.] by $___.__ by ___, 20[__]
Your Budget and Goals are Unreasonable
While financial goals require a certain “reach for the stars” quality, it’s also important to be realistic.
If you set a grocery budget of $50 for the month but have 5 mouths to feed and aren’t a farmer, this may be incredibly difficult. Over stretching your limits may cause you to eventually snap and go on a shopping spree.
I encourage you to trim your expenses as much as possible while remaining realistic about your budget so you can actually stay within it.
- Reevaluate your expenses every month to determine if there is a category that could be trimmed or requires some adjusting.
You Have No Backup Plan
Life is full of unexpected surprises and most of them cost money.
Emergency Funds don’t always get the love and attention they deserve. It’s never too late to start building one, so start today if you haven’t already.
- Set up an automatic transfer with your bank to send a specified amount from your checking account into another out-of-sight-out-of-mind checking or savings account. This will ensure that you save a little (or a lot!) every month and will be less tempted to spend it.
You Doubt Your Ability to Follow Through
Ever hear of the self-fulfilling prophecy? If you doubt your ability to do something, then you may inadvertently sabotage yourself into failing. Don’t do this!
You are smart and completely capable of telling your money what to do and where to go. You are in charge!
- Give yourself a pep talk any time you feel you’re about to purchase an item you don’t need. Say something like, “I am the boss. And I’m telling my money that it will not be bringing home this cozy sweater from Gap because I don’t really need it.”
- Be mindful of situations that may break your budget and take action to make sure they don’t happen. Invite friends over instead of meeting everyone at a restaurant. Delete all of your saved credit card numbers from any online shopping sites. Make it very hard to spend money unnecessarily and you’ll be more likely to stay on track.
Sabotaging your budget can feel disheartening, but you can take comfort in the fact that you’re not alone. Budgeting issues happen to many people, regardless of whether they’re making $10,000 a year or even $100,000 a year.
Never forget that you are in control of where your money goes and that every expense deserves to be examined at lease once. Remember, you are in charge!
Allison is the blogger behind Frugal on the Prairie where she writes about personal finance and money saving tips, homemaking tricks, and family/parenting ideas. She married her college sweetheart, has a son with a smile identical to her own, and is from the beautiful Kansas prairie.