Basic Reasons Why Budgeting Fail

coins-1015125_1920I always wonder why is it that no matter how I put extra job/income and put a watch on my budget, I still tend to fail to manage my finances. Perhaps, some of you has this same situation, too.

As I am always reviewing my finances, I came to realize few things that I may have been falling short of.I have short-listed some of the mistakes I kept on going back to:

  • Lack of Self-Control – Setting aside funds to cover my bills, but used it for something totally unrelated. Each salary day, I set aside money for all the bills and other expenditures. However, there are just moments that I could not control spending on something that is beyond the budget allotted for the month.

         End result: more overdraft fees, penalties and panic attacks than I wish to reveal.


  •  Unrealistic Spending – I set aside a grocery bill every week. But I always end up adding little items at the store, and tend to forget occasional dining out, gas, or entertainment. These small amounts added to the weekly spending (let’s say $25 per week that is already a $100 in a month!), is already something that could have been used to cover for the debt payments.


  • No Blow Money – In life, things happen! But the real test is whether or not we are prepared financially or not. No matter how much we have saved in our emergency fund, budget needs a cushion each month to cover the small, but unexpected increase in expenses. Otherwise, we’ll continue to dip into the savings account until it no longer exists, forcing us to resort to credit cards or personal loans.


  • Base the Funds on Gross Amount, Not Net – Once we are employed, we have the tendency to plan our regular spending based on the gross monthly income. We tend to forget to account for the taxes, retirement deductions and benefits, which definitely steal a portion of the salary! It is a simple thing but yes, we tend to forget all about it.


  • Pessimist’s Mentality – I believe in the old adage “Your attitude determines your altitude”. This definitely applies to budgeting; if you view the entire process in a negative light, chances are it won’t work out for you and you’ll continue to live in dire financial straits. By contrast, constantly reminding yourself that it’s totally possible to follow a spending plan is one of the most important things you can do to stay motivated.

At the end of the day, before I completely overhauled my budget, I spent few moments scribbling financial goals I wanted to accomplish in the future. Some could be as simple as saving for a family vacation fund, but, it became a great way to stay motivated every month!

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