Thursday, July 13, 2017

The Reasons Your Budget Isn't Working

Do you make a budget on a regular basis? Have you got good intentions to get your finances in order, but still find that you’re way off every time you approach the end of the month? Budgeting is really beneficial for those who want to take control of their money, but it doesn’t work unless it’s done properly. If your budget isn’t panning out quite as you planned, and you find that your figures aren’t adding up, here are some reasons why. 


You’re not using accurate information 

Be honest. When you’re budgeting, do you input accurate information or do you use estimates? Even if you’re only slightly out, if you’re not on point with every single payment, this can make a massive difference when it comes to calculating how much you’re bringing in versus how much you’re spending. If you’ve underestimated, even by a couple of dollars on each entry, this can put you out by a considerable margin when it comes to totting up the total. Use a paystub maker to keep track of exactly how much you earn each month and itemize your outgoings. In most cases, you receive bills for your phone, TV package, and electricity a month in advance, so you can use the exact figure for your budget the following month. If you estimate that you spend $60 a month on gas at home and a bill comes for $100 because it’s winter and you’ve had the heating on, going on average payments isn’t going to work. 

You’re not updating your budget

We all know that things can happen that can blow a budget out of the water, but even minor changes can make a difference. Update your budget as you go. If you’ve ended up spending more on a trip than you intended to, note down the revised figure. If you’re up to date, you’ll have a much better idea of how much you’ve got left to spend. Using a spreadsheet or an app will make it really easy to adjust your budget throughout the month. 

You’re being unrealistic 

When you put a budget together, it’s essential to be realistic. If you’re expecting to survive on a total expenditure $50 a week, you’re not going to be able to do this. It’s good to be frugal if you’re trying to save, but that shouldn’t come at a price. Use past budgets to determine how much you would normally spend, and base your new budget on that figure. If you usually spend $500 a month on groceries, it’s not going to be possible to reduce this to $200, but there may be savings you can make. Set the new budget at $400 and see how you get on. 

If you’ve been trying to budget without success, there may be some good reasons why. Budgeting can be incredibly beneficial, but you have to go about it in the right way to reap the rewards. Be realistic, use accurate, up to date information, and don’t forget to record any changes.

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