An uncontrolled shopping habit can cause your budget to fail.
It can be frustrating when your budget is not working. A budget is a powerful financial tool that allows you to make decisions about your spending before you spend your money. When a budget is not working you may go into the negative each month, or you may fail to put money in savings or toward your other financial goals as a result.
Unrealistic Expectations
When you first set up your budget you may set unrealistic expectations for yourself and your family. For example setting a food budget of $50 per person for food each month is not going to be easy to achieve. The first few months of budgeting you may need to adjust your category limits to realistic spending amounts. However some areas you overspend may be different from unrealistic limits.
Failure to Track Your Spending
A budget will not work unless you track your spending on a regular basis. If you do not know what you have already spent, then you will not know when to stop spending. Tracking spending is the most time consuming part of budgeting. It needs to be done on a regular basis; nightly when you first begin, and every few days once you become accustomed to budgeting. If you have specific problem categories, consider switching to cash only for those categories and stop spending when you run out of cash.
Lack of Commitment
A common cause of failure is a lack of commitment to your budget. It is one thing to sit down and write down your budget and your goals, and another to actually follow it each day. If you are not completely committed to your budget, you will cave and overspend when you see the latest pair of shoes or video game you want. Reward yourself, instead, as you successfully reach your budgeting goals to increase your commitment level.
Communication Breakdown
When budgeting for a family, or with a spouse or partner, lack of communication can cause the budget to fail. Each person should have input as you set up the budget. Each opinion should be listened to and a compromise should be worked out for each spending category. Additionally, you need to track the expenses together so both spouses have an idea of what is being spent and where the budget stands at any given time. If this is not done, the budget will not be successful.
