Why budgeting fails

Olivia EmisarStarred Page By Olivia Emisar, 25th Aug 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Money Saving Tips

Budgeting recurring expenses is not a difficult process, what makes budgeting a total failure is the lack of follow through and the current culture that demands instant gratification in every aspect of our lives. Budgeting requires honesty with the numbers, a clear plan to reduce debt and increase savings, a goal to achieve and above all else, a commitment to see the project through.

The most obvious reasons why budgeting fails

People feel deprived just thinking about making changes to their lifestyle. They immediately find excuses to spend more and postpone the dreaded financial diet. To many, it is akin to having a root canal; they know they need it, but will delay it until it is no longer possible to ignore it. They balk at the idea of planning, organizing and committing.

Commitment, clarity and organization:

Without committing wholeheartedly to the idea of living within a realistic budget the entire exercise is an act in futility. Diets, savings, college dreams, relationships and even careers fail due to a lack of commitment and determination. For many, the stress of being in debt is a more comfortable environment than stressing over staying on budget.

Clarity

Lack of clarity often blindsides people; they don’t know what they should be saving for and how to go about spending less. They are afraid of looking at their total expenses and forcing themselves to make the decision to cut some and eliminate others. The stress and effort required to organize their lives is new and frightening.

Organizing the bills, their household and their lifestyle feels like a daunting process that can never be accomplished. Some people are too overwhelmed to move forward and remain stuck in a vicious cycle of debt.

The key here is to break down the task into smaller portions and take the time to fully understand where all the money is going and how to eliminate superflous spending and trim down the cost of living without sacrificing. For example, do the recurring bills first and move on to the impulse buys next. Organization is not difficult, but it requires having enough clarity of mind to tackle the project with determination and a clearly targeted goal.

Taking baby steps is better than not taking any steps at all. Saving for a college education or learning to live within the restrictions of a minimal budget requires taking control of finances and being in the driver's seat when it comes to saving and spending.

Many people are overwhelmed and let the credit card statements dictate the payments, a move that keeps people in debt for decades. A clearly defined plan of action can eliminate debt and put money in the bank for those rainy days, college education or even ease someone into early retirement.

Solutions

Fixed monthly bills include mortgage/rent and utilities, and even those can be cut down through refinancing (without taking any money out) and conservations. These steps should be included after all other steps are taken.

Meals should be prepared at home from items already in the pantry. A weekly list of meals and healthy snacks should be the armor required for purchasing groceries.
Grocery purchasing should be limited to the list. Every savvy shopper knows that “if it is not on the list, we don’t buy it”.

Fresh fruit and vegetables should only be bought in the right quantities to be consumed within a few days. Spoiled food is the same as throwing money in the trash.

Clothing

Clothing should be considered carefully. Most people don’t budget for clothing and rely on impulse buying.

Clear the closets and donate items that are too small/big. Throw out what will never be worn and create outfits for every day of the work week. Most Americans have more clothes in their closet than they need or will ever use. Once the angst of “what to wear” has been eliminated by organizing the closet, a budget for future clothes replacement can be assessed.

Sticking to a clothing budget that serves practical, rather than emotional, purposes keeps money in the pocket and clutter to a miminum.

Keep in mind that everything at the store is for sale and everything that is on their inventory will eventually be on sale or clearance, so there is no need to rush out and purchase over-priced clothing without having a clear purpose for its use and longevity.

Entertainment and final thoughts

Entertainment is a multi-billion dollar industry and consumers happily supply the funding. Movies theaters are very expensive and should be considered a treat to see a really great movie, not something that will be a rental at a kiosk for a dollar in a couple of months.

Revising how we entertain ourselves, how much it costs to do so, and what to do instead needs to be carefully considered to keep the budget in check. Following some of these tips can put thousands of dollars in a person's savings with a minimum of effort or feelings of deprivation.

Arranging for potluck dinners with friends and families will save money and contribute to a rich social life where deprivation won’t be felt. Taking strolls in the neighborhood, going to the park and playing with the kids, volunteering to help others, reading at the library or simply enjoying a favorite hobby can keep us socially engaged and entertained for free or for a lot less. The added benefits of outdoor activities is the extra exercise that releases endorphins and makes people feel good about themselves and those around them.

People who succeed at living within a set budget are those who have made an honest assessment of their debt to income ratio; they have set up a plan to reduce the debt and increase the savings and commit to a plan to change their lifestyle in order to achieve future goals. Without commitment, the best organized budgeting plans will crumble like a house of cards.

Tags

Budget, Budget Style, Budgeting, Clothing, College, Entertainment, Financial Crisis, Financial Future, Financial Plan, Groceries, Meals, Meals On A Budget, Minimal Income, Money

Meet the author

author avatar Olivia Emisar
Writer (obviously), currently working and publishing articles online. My passion is creative writing and novels are always on the works.

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Comments

author avatar Kirsten
25th Aug 2010 (#)

Great tips!

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author avatar Retired
27th Aug 2010 (#)

these are some great tips, and yes I agree with them all, most especially clarity, because if you can't "clear" up your budget would it not "invade" the other parts of your life?

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author avatar Olivia Emisar
27th Aug 2010 (#)

Rebecca, thank you for your comment. You are right, "invasion" is an excellent word. Finances (good or bad) determine people's quality of life and stress levels.
PEACE-Olivia

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