Why You Can’t Stick with a Budget

Budgets are tricky stuff. We make plans to fol­low it. We even include it in of our New Year’s Res­o­lu­tion. We down­load appli­ca­tions to keep track of it (I use MONEYDANCE by the way.) But it’s so dif­fi­cult to do a bud­get, or stick to it, because of so many things. This arti­cle will tell you some of the rea­sons for that. Hope­fully if you know the rea­sons why you can’t stick to a bud­get, you can make tac­tics to bet­ter stick to it.

This is by Stacy John­son of Money Talks News:

Whether your goal is a big­ger bank bal­ance, a smaller credit card bal­ance, or a trip around the world, the fastest path to achiev­ing it is using a bud­get to fine-tune where your money is going, to find extra money and to mea­sure your progress. Get­ting closer to what you want every month isn’t a chore; it’s a plea­sure. If you’ve tried a bud­get in the past and given up, it’s prob­a­bly for one of the fol­low­ing reasons:

1. You didn’t have a goal: You need some­thing to move toward.
2. You started depriv­ing your­self: Don’t go on a dol­lar (or Peso) diet. Do the things you love. Just pay less.
3. You suf­fered a budget-buster: Some unplanned expense or loss of income set you back. Expect the unex­pected. Be flex­i­ble.
4. You got bored: Many peo­ple start a spend­ing plan when they need one, then give it up when they don’t. That’s a sign you need a big­ger goal.

The per­fect bud­get isn’t a budget.

Let’s start our search for the per­fect bud­get by never using that word again. The word “bud­get,” implies depri­va­tion, like the word “diet.” I’m no fan of depri­va­tion, are you? So let’s exchange that term for a dif­fer­ent one: “spend­ing plan.” A bud­get restricts what you do. A spend­ing plan is about mak­ing con­scious and com­pletely vol­un­tary deci­sions about how to allo­cate your money.

So a spend­ing plan doesn’t mean doing with­out, it sim­ply means cre­at­ing pri­or­i­ties in order to reach a spe­cific goal.(See my story on set­ting goals.) You start your plan by keep­ing track of where your money’s going. Once you’ve done that, you’re in a posi­tion to make deci­sions about how to allo­cate your money and spend it accord­ing to your per­sonal pri­or­i­ties. And one of your first pri­or­i­ties should be destroy­ing your debt.

So here’s the drill. Start writ­ing down every­thing you spend — every penny, every day. A lot of this you’re already doing. When you write a check or use your debt card, you’re obvi­ously writ­ing down the amount and payee some­where, right? When you use a credit card, it shows up on your state­ment. When you have money taken out of your pay­check, it shows up on your check stub. So when we talk about keep­ing track of every dime you spend, what we’re really talk­ing about is where your cash is going. The way to keep track of it is to carry around a small note­book and sim­ply make a note of the amount and what you bought when­ever you spend cash. You’ll get used to it in no time, and it’s really not that much of a has­sle. Then all you need to bring your spend­ing plan to life is to trans­fer those num­bers to a form, online or off, so you can review it.

Where do you get that form? There are tons out there. Just Google it yourself.

If you think you don’t have the time, you think the whole idea seems anal, you think you don’t need to do it because you’re already so great with money…whatever your excuse…you’re wrong. Here’s why:

Writ­ing down and review­ing the money you’re spend­ing will result in spend­ing less. That’s sim­ply because you’re think­ing about it. If you doubt that, that’s because you haven’t done it.

When you see where your money is going, you’ll be in a posi­tion to reduce that amount by har­ness­ing some of the thou­sands of money-saving tips avail­able on Wise Bread, my web­site, and many others.

You’ll also get a feel­ing that may seem for­eign to you right now: it’s called con­trol. Going through life with­out track­ing what’s com­ing in and going out is akin to dri­ving while tex­ting. It’s dis­tract­ing, it causes you to lose focus and it ulit­mately slows you down (or worse). Track­ing and plan­ning your expenses is hav­ing your eyes on the road and both hands on the wheel. See­ing where you’re going is a lot less stressful.

Bot­tom line? A goal is where you’re try­ing to go. A spend­ing plan is the short­est path there. If you don’t have a goal, make one. If plot­ting your progress toward it isn’t enough to keep you engaged, then cre­ate a goal that does. When you review your expenses, think about the things you spend on money on that aren’t all that impor­tant to you. Drop them. Think about the things that are. Find ways to have them for less. Expect set­backs, because you’re going to have them. And remem­ber, any­one can do any­thing for a short stretch. Win­ners are peo­ple who keep show­ing up.

In my expe­ri­ence there are two kinds of peo­ple in the world: those who look rich and those who are rich. If you’d rather be in the lat­ter cat­e­gory than the for­mer, plan. It’s really just that simple.