Posted Jul 26 2010 by Marc Chase
If you’re one of the millions of Americans who are currently living paycheck to paycheck and have decided enough is enough – that you’re ready to find complete debt relief and work your way towards financial freedom – one of the first steps you’ll need to take is to set up a budget for yourself each month and stick to it.
Of course, that’s much easier to put in writing than it is into practice, and many people find themselves unable to stick to the budget they prepared for themselves for a multitude of reasons, some even beyond their control.
Here are some ways that budget you prepared to help you control your spending may not be working out as well as you had hoped, and how you can get it back on track.
• You’re spending more than you’re bringing in. This is the most obvious and common problem people encounter, and the primary reason they set up a budget in the first place. If you find that your net income is barely enough to keep you afloat every time the check comes in, now would be a good time to evaluate your spending priorities.
• You’re just not sticking to it. One of the things we always try and stress to our clients when they come to us for credit repair or debt settlement options is that the process doesn’t take place overnight; you won’t wake up tomorrow with a 720 score and lenders beating down your door to offer you the best loan imaginable. The same applies to your budget. You can’t expect to come up with one and then leave it to work itself out. You’ve got to stick to it and refer to it on a weekly basis to make sure you don’t fall into any financial pitfalls.
• You’re not taking the time to get to know one another. On the flipside of that coin, some people find that they’re budget isn’t working out for them, even after a monthly check up. If you’re new to budgeting your annual/monthly income, it’s entirely possible – even probable – that you’ve not factored every bit of income and expense into your budget. If you’re budget keeps coming up short, it could be because…
• You’re not adjusting it. You shouldn’t think of your budget as a binding contract that isn’t open to negotiation. On the contrary, you’re budget could see dramatic changes at any point in time, for any number of reasons (pay raise, job loss, marriage, baby on the way, etc.) and should be adjusted for these occasions. If you’re not factoring these changes and others like them, into your budget, you’re only hurting yourself.
• You’re leaving out some details. Here’s a serious slip-up most people make when setting up a budget for the first time: They forget to include every expense they make into it. Smaller expenses are easy to overlook when creating a budget and are usually the reason you come up short when checking your spending vs. your income. Refer to your bank statements every chance you get to make sure your numbers add up to theirs.
• You’re not having any fun. One of the biggest detriments to setting up a budget for some people is they think it will rob them of any chance of spending money for fun. This isn’t true at all. Budgeting shouldn’t mean you can’t set some money aside for fun; it just means you decide ahead of time what you have to spend on what’s fun, and stick to it.
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