Many people make an honest attempt to budget but become discouraged and give up before they can accomplish any significant financial gain. Budget failure can be quite demotivating, especially when you have made big plans for your financial future.
This is why you should know the potential pitfalls in budgeting before you even begin to set up your budget. Awareness of these budget busters is your first line of defense in your Battle of the Budget.
Check out the article on 8 Smart Personal Finance Tips.
Budget Buster #1 – Negative Attitude
We cannot emphasize enough the importance of a positive attitude in budgeting. If you think of budgeting in negative terms such as a financial diet, financial handcuffs, restrictive, penny-pinching, a sacrifice, etc., you are sure to witness budget failure.
Rather, a budget could be a great way to eliminate the wasteful spending in your monthly expenses. You need to think of a budget as a means to an end or a way to achieve your dreams and goals. Most importantly, it teaches you a way to delay gratification, which is worth the rewards you will earn in the end.
Budget Buster #2 – Lack of Motivation
What is your motivation for budgeting? Are you trying to appease a nagging spouse? Following the terms of a debt repayment plan with a consumer credit counseling agency? Complying with an agreement made in bankruptcy court? These are not bad motivations, but they are external pressures and will probably not be easy to maintain over time. The best motivations are internally generated: do you honestly believe that budgeting can help you meet your goals?
Budget Buster # 3 – Unrealistic Expectations
What do you expect to gain from instituting and following a budget? Do you think that setting up a budget will reveal large caches of hidden cash or that the budget fairy will sprinkle fairy dust over your budget and magically transform your spending habits after a month or two of tracking expenses?
The reality is that budgeting is an endurance event–those who stick with it, through thick and thin, will come out ahead financially. Do not expect miracles. What you WILL see if you stick with it is steady, measurable progress towards the goals that matter to you.
Starting your financial plan without having a positive attitude, internal motivation, and realistic expectations will probably set you up for budget failure. You can greatly increase your chances of success by ruling out the three biggest budget busters before you even begin.
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