When I speak to people about personal finance and how to budget, there is always at least 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 a written budget just doesn’t work for them, and 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 zero-based budget works. And it can work for anyone, period.
A Budget is Financial Truth
I’ve discovered that a budget is not just a nice thought for people who want better control of their money, it’s a basic truth. If you do a written monthly financial plan and stick to it, you will not spend more than you make. Ever. It’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 Budgeting 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 control 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 need to develop new habits. If you tried budgeting and failed, you should try again and stick with it. It gets easier with practice.
Like any new habit, budgeting takes awhile to ingrain into your life. I remember when we started doing a written budget years ago. It took several months of trying to totally wrap my head around it. Now, it literally takes up only about 30 minutes of my time every month to stay on track.
Rest assured, if you stick with it, you’ll eventually “get it”. It’s well worth the time, effort, and discipline it takes to develop your new budgeting 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 your expenses to the point of only budgeting for your needs (food, shelter, transportation, health care, utilities, etc.) and you still don’t have enough money to live on, you need to get really honest with yourself and realize you need to find a way to increase your income.
Increasing Your Income is a Huge Help
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, there are ways to make extra money that can increase your income dramatically 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 few posts I wrote to get you started:
You’re Spending Too Much
If you make more than enough to support your basic needs, but you still don’t seem to have enough money every month, you will need to reevaluate your spending. Are you spending $500/month on shoes and clothing? 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 mighy need to reevaluate those as well. Let’s face it, if you’re making more than the average household (about $61,000/year) and you say you just can’t make it, it’s time to start getting real with yourself. Start challenging every expense you have and find a way to make it work. You CAN do it!
Making a Budget is About Truth
When it comes down to it, making a budget is about telling the truth about your finances. The numbers on the page are the truth of your financial situation, and you should be in the habit of establishing your financial truth every single month with a zero based budget.
Too many people lie to themselves financially every single month. Those lies do nothing but create a pile of debt, financial stress, and lost wealth that makes you a financial slave until you start dealing in truth.
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 financial truth using a monthly budget, instead of lying to yourself by spending more than you make, then, and only then, do your financial problems fade away for good.