If you are into budgeting, you may have realized that creating a budget is the easiest thing to do. The most difficult task is sticking to it – truth is, no one ever does. At the end of the week, month or year (depending on how you plan your budget) you realize that you aren’t able to follow the budget to the letter and just throw in the towel.
Budgeting doesn’t have to be like this though, and it doesn’t have to be a chore either. It can be both fun and simple at the same time. In order to get you through this process and follow your budget a little better this time, let’s take a look at why personal budgets often fail.
1) You Cut Out The Fun – Often, when people make a budget for themselves, they just put all of their known bills in there and set up an amount for the “food” category, but having fun is left out of the budget entirely!
Sure, you might be tight on money, but you should still do your best to budget in some fun that does not cost much.
2) You Forgot About the “Unexpected” and Non-recurring” Expenses – There are plenty of bills each month. These are the ones that are easy to predict, but then there are bills that only happen once every few months, or every year.
Things like car insurance, rent, school fees, generator oil changes – these don’t pop up each month, but you should still put them into your monthly budget because you should be saving up for these expenses.
3) You Have High Expectations – It takes a while to create that budget, and when you’re done you think that there couldn’t possibly be an expense that you missed and your costs on each category are perfect. Then that first month comes and goes and you overspent your budget.
It is possible you didn’t spend on anything lavishly, but how can this happen? Well, you most likely forgot a bill, or maybe you severely underestimated the money for foodstuff. The point is, you will not be able to create a perfect budget the first time. For the first six months, it will just be a work in progress, and you will get better at it.
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This post was written by Ugodre Obi-Chukwu, a chartered accountant and Founder of Resourcedat, Nigeria’s first online document and data sharing website. He asks intuitive questions to try to demystify popular norms that affect the way people live, think and spend money.