One of the most common New Year’s resolutions people make is to create a budget and stick with it…So why do budgets fail?

According to a University of Scranton research study, only 8% of resolution-makers actually keep their resolutions. This means that a majority of us understand that we need to improve our budgeting skills, but we fall short of our efforts in a major way. There is a multitude of reasons for this, but I will cover three of the main ones below.

We fall off the budget wagon

We all know that the first step to fixing a problem is to admit that we actually have one. Well… my name is Ashley and I am addicted to budgeting.

I LOVE looking at my monthly spending plan. I even calculate everything out in a spreadsheet and estimate it on an annual basis because I cannot get enough of looking at those beautiful numbers.

My family and friends know that I would drop my husband and take off with personal finance guru, Dave Ramsey, in a second. He is old and bald, but he is good with money… my kind of man! With that said, I “fall off the wagon” regularly and fail at those perfect numbers in my spending plan. If it can happen to the self-proclaimed “Queen of Budgeting”, it can happen to you too…

Here are some reasons that my budget has flopped:

  • A bolt flew out of the truck I was following and cracked my windshield
  • My dog is allergic to Pine Sol. He is allergic to bee stings. He has also had a fish hook in his ear and almost died from eating a rope toy.
  • I “forgot” that I like to help with school fundraisers {insert eye roll}
  • My daughter likes to dump out entire bottles of bubble bath, shampoo and body wash; she also likes to “try on” my (somewhat) expensive make up
  • I had a baby – babies cost a lot!

Remember the old saying “when it rains, it pours”? This is a common occurrence with our personal finances. Unexpected expenses, lack of self-control and not planning well enough can (and will) throw that impeccable budget off track.

We forget budgets take TIME and COMMITMENT

When you go on a diet, you know that it is going to take time (sometimes several weeks) to see results. You know that it is a lifestyle change and not a short-term fix. Budgeting is the same way.

Learning how to put together a real, working budget takes several months and it is most definitely a lifestyle change. It is SO easy to quit in the beginning.

PERSON ON A DIET: “Whoops. Just finished off a whole pan of brownies. Guess I’ll complete the day with some Doritos and a super-sized Big Mac meal from McDonald’s.”

PERSON ON A BUDGET: “Whoops. I just spent my entire paycheck at The Buckle. Guess my budget is ruined for the month.”

You are not alone if you have had this moment. Change is hard. Dieting is hard. Sticking to a budget – especially long-term – is…. well, hard.

Family and friends are bad influences on our budget

I’m not picking on smokers here, I promise! But, if you are a smoker and have tried to quit, is it easier or more difficult to stop if you are surrounded by smokers?

The struggle is real, folks!

Your budget is no different. When you live in an environment where you are trying to save (or just spend less) and your co-workers, peers or family members are spending like they just won the lottery, you will have a more difficult time making good financial decisions.

Now that we know why budgets fail, here’s how to create lasting financial change

Recognize that you will fall off the budgeting wagon eventually. If you are new to creating spending plans, it will probably be sooner rather than later. Here are some tips to help you create success:

  • Track your spending for two or three months. Take an average of how much you spend in certain categories (especially clothing, groceries and eating out). Use this average to create the amount you will plug into your budget.
  • Have a “miscellaneous fund” AKA “sinking fund” that you can utilize when your dog gets stung by a bee.
  • Use the “envelope system” for budget line items that you struggle with (Overspend on clothing? Take out the cash. Overspend on groceries? Take out the cash.) Knowing that you have a set limit will make you more conscious of your purchasing decisions.
  • Be prepared for it to be a lifestyle change and not a short-term fix. Think of your budget like your body on a financial “diet”. You take care of it long-term – it will take care of you.
  • Surround yourself with people who want to see you succeed!
  • Include your ENTIRE household in the process. Get a spouse on board by getting them excited for a larger savings goal (Alaskan cruise? Disney vacation? Fishing trip?). Don’t compromise your future happiness and security for short-term wants!

As we get closer to a new month, it is a great time to go back and peek at your expenses over the last few months. Calculate your averages and prepare to sit down and create that March spending plan!

Join me as we celebrate a new month and a new opportunity to grow our bank accounts.

As Benjamin Franklin said, “If you fail to plan, you are planning to fail!” Click To Tweet

Want to talk more about why budgets fail or Do you have questions about making a budget work?

Scroll on down and let’s talk in the comments!  

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