Month: June 2021

Why Do Our Budgets Fail?

Category : Finance

Studies show that more and more people are budgeting their money nowadays. But the downfall is that many of them run out of money before the end of their pay period. Why are people’s budget failing? Here are some reasons and a solution to these problems:

1. NO fun. No matter what their budget or circumstances are, every person needs some fun money set aside. They can spend it on anything they want. Make sure to set aside a portion for fun money every month, even if you’re paying off debt. It does not have to be a lot but needs to be there.
2. Too complicated. People track every tiny detail. One should be tracking income and expenses but not in such detail. If not sustainable you’re not going to stick with it if it’s too much a job to keep it detailed. Make it simple to actually stick on it.

3. guessing. Don’t guess on how much you should spend on. Look back, check your bank statements, credit card statements and look on all your expenses and average them out to get a total on how much you actually spend. If you find this out, you can set aside and figure out how much your budget should be.
4. Not measuring. Regularly check on your budget, at least monthly and follow-up to see how you are doing. Always make it a habit to evaluate.
5. Perfection. For many they want their budget to be perfect. They put so much time and effort but note despite this, it is never going to be perfect. We are constantly changing and adapting. Work out on irregularities.