“This month will be better, I’m positive it will be. This month, I’ll actually stick to my budget”.
We’ve all uttered these words to ourselves after the shock of receiving and viewing our credit card bill wears off. Regardless of how much cash you have available, when the bill comes at the end of the cycle we are faced with the harsh black and white printed truth of: it’s almost impossible to stick to a budget!
But in reality, is it impossible to stick to a budget?
Below, we take a closer look at a few of the reasons as to why we can never seem to stick to the plan, and how we can hope to lay down a roadmap that we can actually stick to…well, stick closer to.
We can’t ignore that little voice in our heads.
If you are like me, there is an unignorable voice in your head that shows up whenever you are on the verge of giving in to an irresistible purchase that you don’t really need. This voice always shows up as I am about to walk away and very quietly whispers into my ear “Treat yourself”.
And guess what? I usually wind up “Treating myself” to whatever it was that I was on the fence about. Be it a bagel, or a brand new blazer.
Whatever it is that you are prone to buying, you should know that it is okay to treat yourself every now and then. If you know that you are always prone to buying yourself things you don’t need, then go ahead and make a budget for it.
“The Bagel and Blazer fund” is what mine is, but because I certainly don’t need these things in my life, but they do make me happy, I allot the possibility of these purchases into my budget.
Granted, I can buy way more bagels than blazers with the small amount of money I have in this little fund I’ve made for myself, but if there is something I really want, I can let myself earn these things through saving up.
If I can go a whole two months without any bagels (which my doctor would be happy about), then I can start looking at some new attire options for myself (I have a severe J.Crew addiction). But if I had a really hard morning at work and I want something to reward myself for surviving such a tough morning –then bagel.
Either way, this throw away fund is something that I get to use how I please, and it doesn’t affect the rest of my budget as a whole.
A little “Treat Yourself” fund is totally fine, provided you aren’t pushing a huge chunk of your budget to it. If you can afford a “Treat Yourself” fund, then by all means go for it!
“Thou shalt not spend”
One of the biggest reasons that we fail our budgets is because we see them as rules that can limit our fun. When you set a budget for yourself, you are looking at your entire month on paper, and it is telling you exactly how much fun you can allow yourself for the next 30 days.
If you set yourself to a budget that enlists only $10.50 for movies and entertainment –that’s it for the month. So when your friends hit you up and invite you to go see the latest summer blockbuster, but you’ve already spent your budget allowance on another movie ticket already this week, it looks like you are going to have to stay in tonight if you hope to stick to your budget.
Look, your budget is made by you, so don’t try to give yourself unrealistic parameters that you know you can’t stick to.
If you love seeing movies, then allot your budget to make that be something you can do a little more often than once a month –provided you can afford such purchases. If you tend to get carried away and can’t help by buy movie tickets for you and your friends and your friend’s friends, then that is another problem you have altogether.
Personalize your budget for your own realistic wants and needs, which brings us to the next point…
We have no idea how much is enough.
Another reason that we fall off the rails of our budgets is because when it comes to allotting cash values to our various expense areas –we have absolutely no clue what we are doing. How much should go to Groceries? How much should go to Car & Automotive? Should we have our Travel & Vacation fund take up so large a slice of the budgetary pie?
The best way to address the issue of “how much should I budget for ____” is to go into record mode for two to three months.
Everybody’s financial situation is like a snowflake –each one is completely different from the next (don’t you feel special all of the sudden?). In order to set a budget that works for you, you’re going to have to set up a budget that is actually for you.
You are going to need to go into record mode for more than a single month because one bill cycle is not enough to get an average expense level that you can learn from. At least two to three months is ideal because one month may have an emergency with your car that popped up suddenly, and the next month might be the month that you have driven your car the least in your entire life.
Finding the average of both highs and lows for all your budget expenses is key to mapping out a budget that is realistic for you to follow. Once you feel you have accurate information of what you tend to spend money on and how much for a given cycle, write down your info and voila! You my friend have just made a step to making a personalized budget that actually is fitted to you.
We have no idea on where to learn budgeting skills.
Many times we learn our budget skills from our parents. This is a good place to start because when it comes to being up close to other people’s budgets, chances are you are not getting an all access pass to your friends’ finance records. Personal finances can be a very intimate subject, and as close as you may be to your friends, getting a peak at what numbers they are working with can cause some clamming up.
Your parents are a safe place to reach out to for knowledge because you grew up, lived, and saw how your parents divided up their paychecks into the various expenses. More than that, chances are that your parents had several discussions (probably loud ones) about how much money should go where, or why this purchase is still showing up in the bills even though it was covered in full last month. This is all first hand information that you learn from –all with little to no awkwardness.
Point is, if you are having a tough time figuring out your own budget, you should find a source of real world personal finance knowledge and ask questions on how to be better at it. Your parents are more than likely a good (and free) place to start, as they successfully kept you alive with whatever budget they concocted during the years that you lived with them.
If you have extra money to spend on the matter (a budget to sort out your budget), then a finance professional may even be a help to you, especially if your expenses are completely all over the place.
It’s no shame to ask for help. It may be that you just have no clue of how to spend money responsibly, and that is okay. Getting help from a professional in the field of finance can be a huge help because they can let you know of areas that you are spending too much or where you can even spend more, or even tip you off to loopholes that can save you a ton that you otherwise never would have known about.
So why do we even bother with budgeting?
Let’s be honest –nobody likes to budget. It can be exciting at the beginning when it is all just talk and plans, but once we get into the month and start bumping into the edges of the budget and they start to feel confining, we all tend to opt out and say that “It’s all just too hard!”.
Well, saving money is hard. There is no way to get around that. If you want to save money, then you are going to have to budget.
The road to saving is tough, but to those who truly can exercise the discipline of self-control and sticking to budgets, they are the ones who reach their financial goals the easiest.
Budgeting and sticking to budgets is only as hard as you make it out to be. But guess what? Practice makes perfect. Well, practice at least makes you passable.