Welcome to the second installment of a two-part series where I talk about the budget challenges you may experience while attempting to stick to a financial plan. I came up with fourteen of them in total and I’m going to talk about seven today.
So, if want to stick to a budget, here are some of the issues you may face and how to beat them.
7 More Budget Challenges
1. Not Planning For Emergencies
There’s nothing that can derail your financial progress like an emergency. It’s not like you can get to it later when your fridge has stopped working or your child is sick and needs medical care.
With proper planning, this should not be one of the budget challenges that affects you, though.
An emergency fund is critical if you want to avoid going into debt and getting off track with your budget. Dave Ramsey recommends having a minimum of $1000 set aside for such situations. Before you start your budget, save this money first. I know it might seem impossible at this point to save that much money when you need to cut back but there are ways.
Go through your home and find things you no longer want or need and sell them. Have a garage sale or place the items online. Tutoring others and selling handmade stuff, if you’re crafty are also good options. There should be something you can do to make the extra money and quickly.
If something urgent does pop up, figure out the best way to deal with it. Arrange a payment plan or work it into the budget, if you can. Don’t you dare reach for that credit card unless you ABSOLUTELY have no other choice!
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Creating a budget is a piece of cake when you use the fill-in-the-blanks Monthly Budget Workbook.
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2. No Flexibility
When you create your budget, it needs to offer some flexibility. Often people cram so much into their budgets, that there’s no room if something goes wrong or when you want to do something a little different.
Let’s say you forgot to allow your pre-cooked frozen lasagna to defrost. You check in the pantry but nothing inspirational jumps out at you. In a case like this you could go order some pizza or something. The only problem is you didn’t plan for eating out anywhere in your budget. You assumed you would cook every single day. Every cent in your budget is accounted for and you left none for circumstances such as this.
Now, technically this is not an emergency so dipping into your emergency fund is a no-no. But you don’t want your kids to starve. So, you either end up taking money that was dedicated to something else or you disappoint everyone in the family by serving crackers and peanut butter. Hey, it’s still a meal but you were really looking forward to that cheesy casserole you made.
I gave that silly example to demonstrate that you need to leave a little room in your budget for unexpected situations.
3. You’re Not Writing Anything Down
In order to stay on track with your expenses, you need to make a note of everything you buy. Otherwise, you won’t really know what you’re spending, you’ll just be guessing. And there’s no guessing when you’re on a budget.
You have two options. The first is to walk around with a little notebook and a pen or use an app on your phone whenever you make a purchase. The second is to collect all your receipts and at the end of each day or at a time that’s convenient, tally up your expenses.
Making notes as you go is a much better option if you’re likely to forget to do it later or put it off. Whatever you choose, just make sure you are taking note of your spending.
4. Creating A Budget Is Hard
Many people think that creating a budget is a difficult task and nothing could be further from the truth. What most people struggle with is actually following the budget.
If you’re one of those people who have been dodging the task of financial planning, I have made it really easy to do.
Simply use my free Budget Workbook to create one for yourself. It takes you through step-by-step how to do it. Easy peasy!
5. Budgets Are Boring
Okay, I’ll admit that budgeting is not the most fascinating subject in the world. That’s why this mindset is one of the budget challenges.
If you’re not excited about something, you won’t keep it up. Think about all those times you swore you would go to the gym when you would rather do anything else in the world. Did you actually go?
Anyway, you need to rev yourself up if you really want to stick to this budget thing. Think about your goals. Why are you doing it in the first place? Picture yourself a few years from now when your budget has really started to show results. I promise you’re not putting in this work now for nothing! It will pay off—literally.
6. Forget About One-Off Expenses
A lot of people forget about the one-off expenses they have annually e.g. property taxes or insurance. Then, when it comes time to pay them, they struggle because they haven’t made provisions to set that money aside.
Don’t make this mistake. If you use the free Budget Workbook, I mentioned earlier, you’ll be all set because you’ll have to list everything you pay for by category. This makes it harder to forget about payments. Also, if you leave a little wiggle room in your budget each month, you’ll hopefully save enough money to cover any expenses you forgot about.
7. No Self-Control
I think we all face this at some point in time. Everyone has a weakness, whether it’s shopping or eating out. Be sure to identify yours and find a way to combat it. If you struggle with impulse shopping, wait 24 hours before you make a purchase. Usually, when I do this, I completely forget about the item I wanted.
Eating out is the biggest of my budget challenges and I deal with this by meal planning. There’s usually a way to resist your weakness but sometimes you just need to put on your big girl pants and use self-control.
And there you have it. The complete list of budget challenges that many people face and how to deal with them. Hopefully, this will help you to be more successful in sticking with your financial plans.
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