The 6 Budgeting Challenges Most People Face, And How to Handle Them
February 07, 2023
When it comes to money, it’s more common to have challenges saving and budgeting than not. If you’ve found yourself caught between a rock and a hard place, there’s no need to worry or beat yourself up. These are common problems we all face, and with a few tips and tricks, you can work around them in no time.
Financial resilience means facing budgeting challenges
Budgeting can be a challenge, especially when you’re first starting out. There are some common walls we all come up against, but it’s easy to overcome them with the right mindset. You’re not alone by any means, and getting into your budgeting groove just takes a little practice and discipline. Building financial resilience means knowing what challenges you might face on the horizon and preparing for them.
Here are some common challenges most people face when starting to budget and how you can overcome them.
The “all or nothing” mindset
The first hurdle you’ll need to jump is the idea that you need to budget perfectly from the beginning. When you’re starting out budgeting, you may think it’s as easy as plugging in the numbers and following a plan. But what if that plan doesn’t anticipate some challenges? Does that mean you throw your plan out the window?
No! Budgeting is about learning what works for you. It’s easy to get overwhelmed when you get too far into the weeds of budgeting. Many online resources will preach a “right” way to budget, but there is no system that is “perfect” for everyone. Do what is best for you.
Budgeting is a tool for you. The only “right” way to budget is to frame it around your life and make decisions that work for you.
Start slow with manageable goals before you tackle anything too lofty. Build on what you have and learn from your challenges because you can always change your approach next month. Don’t let one stray purchase ruin the work you’ve put in. Adapt your budget to meet your needs!
Skipping out on fun spending
Another obstacle is the idea that you need to cut out all spending that isn’t necessary. It can be really hard to cancel plans and pass on weekend trips for the sake of a budget. In fact, it’s one of the reasons many have a hard time sticking to a budget in the first place.
It’s important to remember that there’s nothing wrong with going out every once in a while!
This goes along with the point above: you’re told that there’s a “right” way of budgeting, but everyone has their own needs. Who gets to tell you what’s important in your life? Sure, skipping out on plans with friends is healthy for your wallet, but it’s not healthy for your well-being in the long term.
That’s why it’s important to practice spending for fun in moderation. Make sure to put aside money in your budget for going out to restaurants, going to the movies, or going on a small trip on the weekend. Or, plan activities that are budget-friendly for you but still meet your needs.
Remember to remind yourself what you’re budgeting for. You’re saving for fun in the future, not for the sake of having a big number in your bank account. If motivation is something you’re struggling with, reward yourself a little. Your future self, and future budget, will thank you!
There’s a lot of work involved in budgeting, and dedicating time to track spending is another challenge that often gets overlooked. You might plan out your budget and think that’s it. But when are you going to make your budgeting decisions? How much time can you devote to tracking your spending across months?
If you can’t put time aside for budgeting, you may have a hard time setting money aside, too.
That’s why it’s great to have a dedicated day and time during the week for revisiting your budget. Whether it’s on the weekend or during the week, setting the dedicated time aside to think about spending is the best way to avoid constantly thinking about money or feeling overwhelmed by sitting down with your budget once a month.
To make the time commitment easier, there are plenty of ways to streamline your budgeting process.
Having all your budgeting materials, like bank statements and bills, in one place keeps everything close, meaning you don’t have to waste time gathering documents. Also, there are tons of tools and apps that help with tracking spending, so you can write down what you spend on the go.
Any way you can make budgeting easier for yourself saves you time. And time is arguably a more difficult thing to budget than money.
It’s easy to say you’ll stick to a plan, but another common obstacle to budgeting is impulsive spending. Target runs, window shopping, and Amazon make it even easier to spend without thinking.
If you’re an impulse shopper, figure out what makes you spend. Are you shopping because of stress? Is it a fun way to kill time? Before you can find a solution, you need to diagnose the problem.
A great way to avoid impulse spending is by going to the store with a plan. Before you go into a store, have a list of things you need and stick to them. Before you go grocery shopping, plan out your meals. When you go into a store with goals, it’s more difficult to be distracted.
Also, sit on big purchases. Impulsive spending can be dangerous if you’re enticed by a big investment like an appliance. Before you throw a big ticket item in your cart, stop and think. Wait three days before buying anything over a certain amount (an amount which you can determine yourself).
In the meantime, do your research and find the most affordable option for that item. After the time has passed, you’ll have a much better idea if you really want to make the purchase.
Figure out how your spending is affecting your saving goal. Think about opportunity cost. If you spend money on this, what will you miss out on saving? What are your trade-offs? Do you really need this thing? Asking yourself these questions can be your safeguard against a regrettable purchase, and it keeps you accountable through your saving journey.
You might have a solid plan for expenses, but life happens. You never know when you might need to visit the hospital, visit your family, or get into an accident. First off, if an unexpected expense arises, be kind to yourself. No amount of planning you did before could have anticipated it. But, in the event something does happen, it’s good to be prepared.
Emergency funds are a great way to cover unexpected expenses. When you have an emergency fund, your savings won’t be derailed by the unknown occurring. Every month, budget a small, fixed amount for extra padding. Whatever you don’t use by the end of the month can be added to your emergency fund for a rainy day.
How much should you have in an emergency fund? Anything helps! Starting small by shooting a few bucks into the fund consistently is great. Over time, the more you put in, the greater flexibility you’ll have when something unexpected happens.
Inconsistency with budgeting
Like any habit, consistency is key. The last obstacle you might face is having a hard time maintaining your budget over time. Continuously starting and stopping your budget makes it hard to see results over time, and results are a big part of staying motivated.
It’s great to be flexible with your budgeting in moderation, but making a plan and sticking to it is the best way to stay financially resilient. Think about it like working out. The more days you put in the gym, the bigger gains you’ll see. Too many cheat days and your progress could be stunted. Saving is the same way, except the gains are in your pocket.
It can be hard to stay consistent with your budget as a household. If you’re budgeting as a family, set a common goal together. This way you can work toward your saving goals together to keep yourselves accountable. Set time aside to discuss your budget with your family and have everyone weigh in. This makes it easier to delegate tasks, but it also motivates everyone to work together.
Practice makes perfect, and SaverLife is here to cheer you on
Things may not go as planned, you may find it hard to stay consistent, and life may throw you some curveballs along the way. Remember, though, that having a budget is better than nothing. Your budget will better fit your life the more you practice.
SaverLife wants you to be financially resilient, and we’re here to be your financial coaches. If you’re starting out saving, you can sign up for SaverLife to track your savings and see results over time. We’ll even give you points you can redeem for cash and rewards along the way. More than that, SaverLife has an awesome community of like-minded savers to help you whenever you need it. Interested? Try out SaverLife for free today!