So you’ve taken some initiative to spend time creating a fantastic, future-proof budget plan. However, you’re still losing more money than you’re bringing in.
What on earth could be going wrong!?
Ladies and gentlemen, your budget plan isn’t balancing very well, and here are 3 reasons why and what you can do to solve them.
1. You’re Spending Too Much
You’ve got all your figures set up, but you’re just not following through.
In most cases, the people who end up in this pitfall are unaware of how much they’re spending on items which vary each month.
- Nights out
Focus On Your Main Budgeting Categories
There is no need to create several sub-categories for your expenses. A budget for gaming, a budget for alcohol and a budget for takeaways no, no, no!
What you need to do is focus on having main categories such as food, expenses, savings, goods and pending purchases. Write out a clear explanation of what each category entails and is comprised of.
You should compile everything under one bracket, rather than having 3 or 4 separate sub-categories for food.
My budget for food a month is about $180. However this doesn’t mean that I spend $180 a month on food, I just ensure I don’t go over this figure.
In this case, $180 a month is my budget for all my groceries including takeaways and meals out with family.
Things like alcohol I’d drop in the goods category and treat it like any other purchase for myself that I would make off or online.
You need not be concerned about whether your balance hits zero at the end of each month.
In fact, you’d be better off if it didn’t, as the money left over can be used as extra disposable income for yourself. Or you could simply add what’s left over this month onto next month’s figures, giving you even more money to spend from.
2. You’re Inflexible With Regards To The State of Your Personal Subscriptions
Most people underestimate the amount of money they expend each month in their household.
We spend too much money on unnecessary things, which drive the figures so high. This leads us to take out credit cards and high interest loans to cover our mistakes.
In my household, I’ve noticed that people struggle with direct debits the most. I’m not referring to gas and electricity bills, but rather their own personal monthly subscriptions, which are just far too important to let go.
3. Failing To Identify A Need From A Want
Your budget plan exists to reduce your debt, increase your savings and most importantly, eliminate stress.
However, the only way to reach that goal is through learning how to delayed gratification.
If that means no more bi-yearly holidays because it’s not financially possible, then so be it.
If that means no more PlayStation Plus, Xbox Live or premium make-up kits, cut them out as it could mean the difference between achieving your budgeting goals or falling to more debt.
Think more about the difference between a need and a want, and spend your money accordingly