When I wrote some of my recent articles on how to budget, I wrote two posts entitled “How Do I Start a Budget?” and “How Do I Start a Budget (Round 2)” as well as “How Do You Budget on a Variable Income?”. But I just now realized that, in all these articles there is something that I left out.
I realized that when I speak to people about personal finance and how to budget, there is always that one person that tells me “I tried to do a budget, but it didn’t work”.
When they tell me that, they sincerely believe that trying to do a written budget just doesn’t work and that there must be some better alternative. But there is one thing I’ve discovered about budgeting over the years, and that one thing is that doing a written budget works, period.
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I’ve discovered it’s not just a feelgood thought for people who want better control of their money, it’s a basic truth. If you do a written monthly zero based budget and you stick to it, you will not spend more than you make. That’s a basic truth that works every time, for everybody, no matter your income. Because that’s what truth is, it’s absolute and unchanging.
Common Budget Problems
So if you’ve tried to do a budget and it just never seemed to work for you, here are some common problems you may have run into that kept you from getting your budget done correctly and getting on top of your financial situation:
- You Didn’t Stick With It- If you want to live within your means and stop spending more than you make, you have to develop new habits. If you tried to budget and failed, you should try again and stick with it. Like any new habit, it can take awhile to ingrain it into your life. Learning how to budget can be especially difficult because it may take a few months of doing it to really understand how to budget effectively and really wrap your mind around it. Rest assured, if you stick with it you’ll eventually “get it”. It’s well worth the time, effort, and discipline that it takes to develop this new habit, and it will continue to reap ongoing rewards the longer you continue to do it.
- You’re Not Making Enough Money- If you’ve written everything down and cut all expenses to the point where you’re only budgeting for your needs (food, shelter, transportation, health care, etc.) and you still don’t have enough, you may need to get really honest with yourself and realize you need to find a way to up you income, I know this can be a touchy subject but it shouldn’t be. If you’re at a point where you can’t provide enough food or shelter, there are social programs that can help. Even better though, there are ways to make extra money that can increase your income if you learn to think a little differently. Through the power of the internet you are now able to offer any talents or skills you have to literally billions of people worldwide. I’m thoroughly convinced there has never been another time in history where it has been easier to make extra money. That doesn’t mean there’s no effort involved, but the world is your market, and it wants what you have to offer. Here are a couple of posts I wrote to get you started:
- You’re Spending Too Much- If you make more than enough to support your basic needs and you don’t seem to have enough to make it every month, you may need to reevaluate your spending and expenses. Are you spending $500/month on shoes? You might need to reevaluate. Spending $50/month on a barely used gym membership or $300/month on eating lunch out every day? You might need to reevaluate. You may even be
overspending on needs such as food or your mortgage, so you might have to reevaluate those as well. Let’s face it, if you’re making more than the average household (about $46,000/year) and you say you just can’t make it, it’s probably time to start getting real with yourself and start challenging every expense you have and find a way to make it work. You CAN do it!
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Making a Budget is About Truth
When it comes down to it, making a budget is about truth. Those numbers on the page are the truth of your financial situation, and you should be in the habit of confronting and even challenging your financial truth every single month with a zero based budget.
The thing about any truth is that it is unchanging and absolute. Your financial truth may be better some months and worse in others, but when you learn to deal in truth with a monthly budget instead of lying to yourself by spending more than you make, then, and only then, do you start succeeding with your money!