The majority of our clients make a very good income, yet many find themselves struggling to get ahead financially. Time and again one of the first things we’re asked is; what am I doing wrong?
Most have tried to stick to a budget with little success, so the question is; why do budgets that work on paper, fail to work in practice? We’ve identified five reasons that contribute to budget frustration.
1. Unrealistic or Missing Numbers
Many of us underestimate how much we actually spend on everything from groceries and gifts to dining out. We also tend to forget to include expenses like annual credit card fees, Halloween candy, iTunes, Netflix, school field trips, school lunch programs, Costco memberships, and charitable donations.
2. Short Term Outlook
If you try to budget only for the month ahead you’ll find yourself running into big expenses you aren’t prepared to handle. You need to be planning for summer camps, vacations, Christmas shopping and back to school expenses all year long.
3. No Plan to Support the Numbers
If you’ve decided that you are spending too much at the gas pump each month, have you arranged to carpool or bus to work? If you are trying to lower your water bill is the whole family on board with shorter showers?
4. No Motivation
It’s important to have a goal that gets you excited, it’s realizing that goal that gives you a reason to stay focused on your financial plan.
5. Life Happens
Budgets often flounder because life won’t conform to a spreadsheet. The dishwasher shuts down or the garage door won’t go up. The cat gets sick, or your son outgrows his bike. Life is messy and things happen.
So what’s the answer? We help our clients have a mind shift from a static budget to a flexible guilt free spending plan.
If you’d like to know more, contact a Money Coach through our Coaches page.
I agree with every point made in this post. I will add that budgets hurt people’s feelings. A budget is a reflection of a person’s spending habits. A budget will show you that you are bad with money, waste money, and never consider the future. Most people like buying things they don’t need or want on impulse. A budget will show you that you are your own worst enemy if you are trying to become financially independent. However, keeping and updating a budget is intimidating and requires discipline. A lot of people won’t do it until they hit they hit rock bottom with bad debt or a life crisis.
Thanks for your comment Allen.
The process of making a budget will certainly reveal the reality of one’s spending habits… good, bad, or ugly! That can make it difficult to do, but also an extremely valuable exercise. If one wants to take control of their money, understanding how one currently spends money and how one *wants* to spend their money to achieve their important goals, is absolutely critical.
In working with hundreds of clients, we understand the struggles that many people have with budgets, and work with them to create a system that is personalized, easy to maintain and effective at keeping them on track. And as Money Coaches, we are there to support, encourage, and keep them accountable to their own stated goals and adapt to changing life circumstances so they can achieve the life they want.