Iknow. I know. You have made New Year’s resolutions before and they just didn’t work. You have tried budgets before and they just didn’t work. So “Why,” you are thinking, “would I want to start a new budget for the New Year?”
I challenge you to give it a new try. Millions of people successfully manage their money and you can too. Just avoid these pitfalls and you can win with your money this year and not fall victim to having your budget busted:
1. Leaving things out of your budget.
Many people try the yellow lined pad, write down what they think of at the moment, and expect it to work. Budgets need to include EVERYTHING, including an appropriate amount of “blow money”. Why? Because in real life we really do blow money.
2. Over complicating your budget.
Computer nerds: listen up. A workable budget isn’t a 10 page excel spreadsheet that you deliver from the mountain like Charlton Heston in “The Ten Commandments”. A workable budget needs to be simple. Especially if both husband and wife are trying to use the budget together. Make sure both have access and can make sense of what the other is doing.
3. You don’t actually do it.
Some people talk about budgeting and think about budgeting but never actually get paper and pencil out and write one. You’ll never finish what you don’t start.
4. You don’t actually live on it.
A common mistake is to write a budget, put it in a drawer and not actually follow it. Here is the deal: you control the budget, but once it is complete, it controls you until you decide to change it. How will you know if it works if you don’t actually follow it?
5. You don’t give yourself enough time.
When it doesn’t work after one month, don’t give up. You are normal. These things take time. Allow at least three months before your budget on paper reflects reality. Even then, you will need to fine tune those numbers on a regular basis.
Don’t give up because of past failures. You work hard for your money and it should work hard for you. Get up, dust yourself off and try again!
This has been another guest post from Joe Plemon from Plemon Financial Coaching.
photo by auntsmack4u
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{ 4 comments… read them below or add one }
A lot of people may actually begin starting a budget but don’t actually follow through with it, which of course is the most important part. I have trouble trying to budget every little thing. You mention don’t over complicate things, but what’s the crossing line between tracking everything and not being too complicated?
Thanks for the mention, Joe and Jeff! Points 1, 3, and 5 are really good. If you leave things out, don’t actually put things it to use, or give up too early, you definitely won’t stick to it.
RC@Thinkyourwaytowealth’s last blog post..Discussing Money Issues With Your Wife or Husband
Regarding point number 1, a good way to ensure that you haven’t left anything out is to take out all your credit card bills and sales receipts for the last 3 months and look at them to see what you have been spending money on.
Richard-
Great suggestion. Nothing like some accountability on what on you are actually spending vs. what you think your spending. Call it a hunch, but I imagine there will be some discrepancy with most households.