Why budgets fail... Page 2
continued
Our final cause for budget failure is not
understanding what a budget really is. Too many people think that a budget is something to
keep them from spending money. And that's wrong. It's not a straightjacket. A budget is a
tool to provide you with information to manage your finances. The knowledge you gain by
tracking income and expenses will help you get the most for your money. In fact, a budget
can help find money that you can spend where it will give you the most enjoyment.
Fortunately, all three problems can be corrected with the same answer. And that's to use
the budget as a management tool. Each month your budget will show what you planned and
actually earned and spent.
That's valuable information. The trick is to see where the actual number was way off the
expected number.
Once you've found a big difference you can begin to analyze why it happened. Was there a
big one time expense this month? Maybe you committed our first mistake and just guessed at
what you'd spend. But it could be that you've been spending carelessly on groceries. If
that's the case you'll look to find some savings this month.
Each month work on the biggest differences until the whole process runs smoothly. Just
take on one or two at a time. Each month you should get closer to actually having control
over your finances. After awhile it's just a matter of checking to make sure that
everything is roughly on target and making minor mid-course corrections.
Now that's not to say that it's easy to resolve those differences. Sometimes it's not. But
it's always easier to work when you have some clues to help point you in the right
direction. With the information that your budget provides you know where to look for
possible savings. And often that's the difference between frustration and success.
It's always a shame when you work hard and don't get any benefit from your work. Don't let
that happen to your budget. Because it takes much less effort to fix a budget than to
start one. You've already put in the hardest work. Take the time to get the benefit. You
deserve it.
Gary Foreman edits The Dollar Stretcher
website. You'll find the web's largest collection of free money saving articles. There's
even a free weekly email newsletter. Visit Today!
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