5 Reasons Why You Can’t Stick to Your Budget and How to Fix It

For years, I struggled to budget. I was frustrated that I was following all the budgeting rules but still coming up short. After carefully looking at my spending over a few months, I realized I was making several budgeting mistakes.

Once I corrected the errors, I was able to stick to a budget that helped my family become debt-free, save money, and buy a house. Below are some reasons people struggle to stick to a budget and how to overcome them:

1. Budgeting Only for Monthly Bills

Ideally, a budget is a written plan for how you are going to spend all your money on a monthly basis. I find the categories most people fail to include are school activities, restaurants, groceries, gas, entertainment, personal care, and gifts. These are typically expenses without billed statements that go up and down each month. Either use your online bank budgeting tools or a budgeting app to track your spending to make sure your budget truly reflects all your monthly spending.

2. Having Unrealistic Expectations

It takes about three months to adjust to budgeting. Give yourself the grace to make mistakes and learn from them. Be realistic; it’s tough to go from eating out every night to making homemade organic meals. It’s okay to have a few frozen meals and limit eating out to your busiest days. Also, look for opportunities to make the most of your spending by dining at restaurants where kids can eat free.

3. Overspending in One Area

If you spend most of your paycheck on a car or home, you will struggle to cover unexpected expenses (see #4). One rule of thumb is to spend no more than 25-35% of your take-home pay on a mortgage or rent. Another for cars is the 20/4/10 rule: Make a down payment of at least 20%, finance your vehicle for no more than four years, and spend 10% or less of your gross monthly pay on total monthly car expenses (car payment + insurance).

4. No Savings

Savings should cover at least two types of needs: known and unknown expenses. Upcoming known expenses include scheduled car and home maintenance, car registration and gifts. The other need is to cover those unfortunate surprises—unusually high costs like transmissions repairs, medical expenses or a busted pipe in your home. Try to save at least three months of expenses in an account at a different bank than the one you use for daily spending.

5. Not Updating Your Budget Monthly

Your budget should change as your spending needs change. Examples include higher daycare expenses during school breaks, a higher electric bill in the summer, or a higher gas bill in the winter. Overlooking these fluctuations can have you scrambling to cover expenses.

Don’t lose hope! With a few tweaks, you can find success with budgeting.

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