The Reasons Why Budgets Fail Articles | Personal Finance

By: Guy Starbuck

A lot of people have bought budget books and ledgers with the usual intention of setting up a great household budget, only to end up leaving these books and ledgers unattended and finally ending up in the trash sooner or later. Why do a lot of people ditch their budgets before we actually get a chance to see them through? The experts feel that these are the primary reasons why budgets fail.

Attitude:

Diets tend to deprive you of the kind of food that you like the most and the ability to make decisions about your eating habits. A lot of people see budgets this way too: as a finance diet. In reality, budgets aren’t made to deprive you of anything, it is just a tool to show you how your money can be spent in order to give you the financial freedom that you need to buy the things that matter most to you without regrets.

A budget that is sensible allows you some occasional excessive spending and the opportunity to save for items that are much bigger in future. However these items are bought with a consideration of how future purchases will be affected.

The key to budgeting properly is to realize that your current finances may not permit you to go out with friends to a dinner and theater every Saturday night. However, movies might be a possible option and maybe a concert every month or two as well. Instant gratification is nice but you can't really spend more than you make on stuff that isn’t important without suffering serious consequences.

Motivation:

Ask yourself this important question before creating your new budget: “why am I suddenly interested in living a budget-centered life?” If the answer is: to appease my nagging spouse or parents; to live up to a bankruptcy initiative; or any other outside circumstance, then you may be setting yourself up for failure. On the other hand if you have finally realized that it is the only possible way to ease up your financial burden, lower the stress you’re currently suffering from, then you’re on the right path. You can control your money and your life effectively. You have to realize that getting into this lifestyle with the necessary motivation is what you need to succeed.

Expectations:

If you think living frugally for six months will get you out of $30,000 worth of credit card debt, and give you the money to purchase a new BMW, then you’re going to be sorely disappointed. A budget isn’t a quick fix; rather it is a permanent way of life. By streamlining your expenses, you will free up much more income for those important things that you want to buy, but not immediately. You should start off with reasonable expectations and a pace you can keep up with so you can reach your goals and succeed at bigger things.

If you start a budget without the right attitude, motivation and realistic expectations, you’re doing something similar to starting a diet with absolutely no intention of reducing the amount of food that you Plan to succeed not to fail.