Knowing how to stick to a budget is simple… on paper. When real life happens, however, things get complicated. For example, no one puts “speeding ticket” as a line-item on the anticipated expenditures for the upcoming month. And no one expects the dog to need an emergency visit to the vet – these things simply happen.
The trick is not to ditch the budget, but to prepare early for surprising budget busters. Here are the most common reasons even the most well-crafted budgets go off course.
#1. Impulse buys. Avoid this common pitfall by committing to a lenient budget – at first. Allow yourself an entertainment category, plus a “whatever I want” line item so your new spending plan feels more like freedom than chains.
#2. Occasional expenses. Registration fees for kids’ sports, car Insurance, real estate taxes, trash service and birthdays can all be considered occasional. They’re surprising, even though you might have them on the calendar. To circumvent these yearly expenses, simply add a line item into each monthly budget of 1/12th of how much the total is.
#3. Convenience food. Drive-through and take-out meals are expenses that often derail the budget. Avoid the pitfall of purchasing convenience food by packing your lunch the night before.
#4. Time and energy cost. One of the biggest budget-busters isn’t a financial expense at all – it’s the sheer difficulty (“cost”) of being consistent over time with tracking and recording transactions. Reviewing your budget each day only takes a minute or two, but even that is hard to sacrifice when so many things are vying for your attention. A creative solution to this issue is to set a timer every evening to tag and categorize each transaction from the day.
#5. Lack of purpose. Another non-monetary budget buster is the vague desire to be financially free. Knowing exactly why you’re budgeting is just as important as knowing how to stick to a budget. Combat this tendency by writing specific goals, both long-term and short-, on your budget. Include a picture or inspirational quote in the margins, if you’re so inclined.
#6. Emergencies. Unfortunately, emergencies are part of life, and all too often, they derail the budget. Medical issues, car collisions, house repairs, and veterinary bills are not typically things you expect to happen – but you should. Plan early by treating these like periodic expenses (see #2), and you’ll be ready to absorb the events when they pop up.
If you want to know how to stick to a budget, the solution is not more militant self-control. Instead, it’s having alternatives in place for when life throws you a curve ball.