It is one thing to spend time to make a budget, the real work lies in staying true and sticking with your budget, below are some reasons you are not sticking to your budget and how you can fix them and avoiding falling into traps that lead to unsustainable spending plans.
Focusing on the negative
According to a financial planner, Brad Klontz, “most people treat budgeting like they are on a diet and this triggers a sense of deprivation. As a result, people tend to avoid doing it, slide back into overspending or be sloppy or dishonest with themselves when looking at the numbers.”
Instead of focusing on areas you can trim, Klontz suggests kicking off the process by thinking about what you are ultimately saving for—whether it’s improving your financial security, buying a car or finally building your own house.
Reframe it as a spending plan, not a budget. That gets you passionate and excited about achieving your goals. Then, ensure you are working toward what matters to you and cut all the stuff that’s not important.” Once you have engaged the emotional part of your brain by establishing your priorities, sticking to your budget will be a lot easier.
READ ALSO:Japaul, Pharmdeko, Prempaints post loss in Q1 2019 results
Doing everything manually
In this modern age of technology, please automate as much as possible, the more work you have to do each month to put money aside, the more likely you are to stop doing it.”
You can start by setting up automatic bill payment using apps like QuickTeller, Paga e.t.c. Set automatic transfers to your dedicated savings account and so on.
Do not think that you cannot fail
No matter how committed you are to sticking to your spending plan, almost everyone slips up occasionally. Be honest by completing the following statement: “If my budget were to fail, it would be because of ___.” Then plan what you can do to prevent yourself from caving—whether that’s calling a friend who’ll help you stay strong, waiting 24 to 48 hours before pulling the trigger or cutting back in other areas now so that you can spend more here later without derailing your budget.
Forgetting the irregular expenses
When creating your budget, most people analyze the last few months of bills and purchases. But they blank on non-monthly costs like emergency auto repair, property repair and so on. If you are a car owner or homeowner, for example, there are very strong odds are you are going to have car trouble and need home maintenance at some point during the year, so budget a little extra for unexpected expenses like those.
READ ALSO:‘Avengers: Endgame’ beats ‘Titanic’s $2.12bn box office record
Not been flexible
You need to allow some flexibility for unexpected expenses, leisure activities and even pampering yourself a little. If you do not leave yourself a cushion, you’ll be forced to dip into your emergency fund. It is ideal to allocate around 20 percent of your income for variable expenses like these, then saving or investing any that’s left at the end of the month.
Cutting the wrong things
It’s great to aggressively reduce your spending to reach your goals, but certain cutbacks will sabotage your efforts in the long run. Another mistake people make when paring down expenses—particularly to ensure that stay away from any form of debt. Only a small portion of your income should go toward debt, and once you have an emergency fund built up, the rest should also go towards retirement.