I’ve been asking those that subscribe to grab my free workbook what their biggest challenge is and oh my goodness! I’m loving the responses so far! So, I thought I’d pose this question to all readers….
What is your biggest budgeting challenge?
So far, the most common response seems to be sticking with a budget. Now, I wish I had a magical formula that I could share with you that would make every budget you ever create perfect and super easy to stick to, but the cold-hard truth is that there is no magical formula.
I still fail with sticking to a budget and my entire blog is devoted to helping others budget and manage their money well….I believe that’s the definition of irony. 😉
So then why? Why do we fail to stick to our budgets?
For me, most of the time it’s because the budget is either too complicated or it’s done but it’s in my head (i.e. not on paper just floating around in my brain somewhere).
It’s Complicated….
I mean, who really wants to have to organize and categorize expenses into 20 million different categories?
Not me.
Sometimes having several different categories can be beneficial for your budget but other times, it’s way too complicated. For us, I just have a clothing category with two separate categories listed – back to school and special occasions.
I used to have several different clothing categories and that just made entering in transactions way too much to do and I’d end up pushing it off for as long as possible until eventually I just never entered the transactions.
The problem was that by having to divide all of our purchases into these tinier categories, I was avoiding managing our money because it simply took way too much time. So now, I have as many board categories as possible and only small more specific categories where needed.
For example, instead of breaking our auto fund budget into numerous different categories like oil changes, tires, maintenance, emissions, etc. We just have a budget line item of $75 a week that is drafted to our auto fund. This allows us to build up a reserve of money for all auto related expenses without stressing over, “do we have enough room in the budget for this $140 car battery?” because yes, we do have the money – in our auto fund. And so long as we leave the auto fund for only auto-related expenses, we’ll always have the room in our budget.
If you’re struggling to stick to a budget because it’s too complicated try and simplify it so you’re not having to enter in a bazillion transactions into all these tiny categories.
Outta Your Mind…
Believe it or not, I still struggle with this one. I’m a firm believer that in order to budget well, you have to start by writing down your budget. Now, this doesn’t have to be perfect. There have been several seasons in my life where I just kept our budget in a notebook – a regular ol’ college ruled spiral-bound notebook. Nothing fancy but having our budget written down has saved our tails more than once. And any time we fail to have our budget written down, we fail with our money.
There is no right or wrong way to keep track of your budget, but I do suggest that if this is your first time really trying to stick with a budget that you physically write it down. As in, you don’t put it in a Excel spreadsheet or use software – you put pen to paper and write it out. Why? Because something happens when you force yourself to write down the numbers and to think through the process. I can’t really explain it, but it helps you to take better ownership of where your money is going.
After you’ve gotten the hang of doing this for a couple of months then switch to another system that you feel more comfortable with like a spreadsheet or software.
If you’re finding sticking to a budget difficult, I want to encourage you to go through your budget and determine what categories do you really need? And then, write down your budget on piece of paper and make a point to stick to it by pulling out your spending cash for that week and recording your transactions that day (we call this a “money minute” in our home).
Spend a little time today going over your budget and make sticking to it a priority.
So, what’s your biggest budgeting challenge?
My readers are all about budgeting, too. The biggest thing that I think helps them is to keep them motivated. It’s really hard to stay focused and motivated, so I try to provide that encouragement daily. Otherwise, life just gets in the way!!
I found that because money is fungible, it’s too easy to move money into other categories to “pass” your own budget. If I have a Coffee fund and a Fast Food fund and a Restaurants fund.. someone might go over budget in one and just slide the money into another category because they are too similar.
I think you’re right to simplify things because it’s easier to work with and harder to play with the numbers.
I think many people have a problem with tracking their expenses realistically. A budget won’t work if you’re just estimating everything! Many people spend much more each month than they realize.
I really enjoy writing a budget. The hard part is tracking my expenses against it. I do best when I track things everyday, so I remember exactly what expense goes where.
This might sound strange, but what encourages me the most is when I see bloggers show us their budgets at the end of each month. (The amount they budgeted for in each category, and what they actually spent…and of course I LOVE the nitty gritty details like Stephanie from Six Figures Under provides, because face it, a lot of us are nosey, lol). When my (blogger) friends show that they stayed on their budget or slightly under, it encourages me to aspire to be like them. When I see months where they did not stay on budget or went over, it also encourages me: Reminds me that they are human too, and that I can stop beating myself up when it happens to me. But instead, to pick myself back up and to make the next month the best month ever, instead of giving up. And while we are sort of on the topic, I also love seeing more numbers like how much went to debt or financial goals and so forth…but I know everyone has their comfort level of what they want to share (and also that us moms have very limited time, lol).
I love your simplistic method of sticking to a budget. I primarily use the budget features on mint.com but often times it turns what I would consider one category in to 5! For example, food becomes grocery store, restaurants, and fast food instead of just being food.
We used to use Mint too and sometimes the categories they would come up with for certain transactions was hilarious. 🙂
I think for me, it was initially all the things that would come up that we didn’t expect- like parties, dinners, bridal showers, etc. We have allotted a certain amount for this now but man that was tough initially. It felt like there was always something that came up! Getting used to budgeting and taking the time to write it all out is a big step. I like how you mentioned you should write it all out at first. That definitely helped us! Great article!
Sticking to a budget is legitimately hard! The 3 keys to sticking with a budget for me are:
1. Having a really awesome, clear goal to work toward that is more important than the things I want now (for me it’s having enough money to travel).
2. Looking at my budget and entering transactions at least once a week (sometimes I update mine 2-3 times a week if I have a lot of transactions-I use YNAB and love it). You HAVE to spend time on it regularly or it comes to the end of the month and BAM! you realize you blew some of your budgets big time!
3. Setting actually reasonable budget amounts and not trying to make a tight unachievable budget every month. Also, just adjust budget amounts mid-month if you realize it wasn’t reasonable. Motivation is everything for me-I’m definitely the kind of person that used to just say “Well, it doesn’t matter anymore!-I’m already way over so I’m just going to spend!”.
I love your suggestions. The biggest challenge I run into with my budget is buying too many things that I don’t really need that add convenience to my life.