My husband and I sat down and started to discuss the process of purchasing a home. We decided that we would spend the next few weekends riding through different neighborhoods to get inspired. We soon decided we were ready to start the process of purchasing our forever home.
We met with a few home builders and reviewed some blueprints to determine our ideal floor plan. We knew we had a set limit on our home purchase, and we wanted the most bang for our dollars.
Before we started this process, we discussed our current expenses and our current incomes. You should always discuss your current financial situation before you consider buying a big purchase such as a home.
In order to not be house poor, you have to have a plan, a blueprint of your finances. Our house was built with a blueprint and we handle our finances using the Budget Blueprint.
Your budget should be an active document that mentally changes your mindset about money.
Here is a list of 7 Tried and True Reasons Your Budget Doesn’t Work.
1. Trouble Getting Started
You have to write down the details of your finances. There is just no other way to create a budget. You can write it down on a piece of write, type it on a spreadsheet or a budget application.
You cannot simply have the numbers inside of your head and call it a budget. It will not work. You have to know the details of your finances.
Starting a budget at the beginning of the month is solid advice. You should jot down a written budget or a cash flow plan that you can use every month. A budget will consist of all your expenses and income.
2. Omitting Line Items and Categories
I’ll be totally transparent with you. The first month will be challenging. Telling you that it was a disaster for us is an understatement.
You will set amounts for expenses, forget expenses and your numbers will be wrong. It happens. Don’t be afraid to adjust your numbers but first discuss the adjustments with your spouse.
Remember this is a team effort.
Your next month will seem better but don’t expect it to be perfect. Over time your numbers and your mindset towards your budget will get better. I learned quickly that writing down our budget was easy but holy macaroons living the budget was truly the test.
If you are expecting overnight success you can forget it.
3. Budget Is Too Restrictive
Do you think that a budget puts a restriction on you? For example, let’s say you love to go to the movies. A budget doesn’t say you can never go to the movies again. This is the main reason a lot of people don’t like creating budgets or will quickly say my budget doesn’t work.
A budget simply tells you to add a line for the movies. Depending on your budget amount for the movies you can start enjoying the cheaper matinees. I honestly can’t remember the last time we went to a night movie.
When we go to the movies, we always go before six o’clock. On Tuesdays, we can watch new releases for $5.00.
Let me confess, I love popcorn! I have to make sure I eat before I go. Sometimes if our budget allows, I will purchase a small popcorn. But remember you are starting a budget to become financially free.
Sacrifice will be a necessary part of this process.
4. Accountability
When creating a budget, you need accountability. It’s similar to starting a diet and exercising. If you have a personal trainer holding that you visit weekly or a program that requires a weekly weight check you are more likely to stick to your goals.
If you are doing it on your own it takes a strong mind to hold yourself accountable.
This is the same for your budget. When you set down with your spouse to discuss your budget you have to be open about hiccups and mistakes that might have occurred with your expenses. This is the only way to make things better the next month.
Mistakes will occur but when you have accountability these mistakes will not happen over and over again.
You have to hold yourself and your spouse accountable to make this work for your family.
5. Lack of Discipline
I remember when we first started our budget, balancing our checkbook was my least favorite activity. This is so important to avoid overdraft fees. Balancing your checking account is an important step in the process of budgeting.
A budget would be nice if we could include everything our heart desires. This is unrealistic. You will have to make some sacrifices. There is just no way around it.
I would love to go get my hair done every week but it’s unrealistic to save money this way. I make the sacrifice and wash/fix my own hair unless I have a major event going on. I’m not saying I never treat myself with salon visits but every week. No.
You have to track your money throughout the month. There is no way to be successful with a monthly budget without staying on top of your spending. Waiting until the end of the month and praying the numbers will look good is not a good plan.
6. Unexpected Expenses
We all know life happens right? There is no other way to say it! You will have unexpected expenses that are out of your control.
They could range from vehicle expenses, medical expenses and the list goes on. You have to get to the place where you are better prepared to handle these extra expenses. This is what it’s important for you to have an emergency fund.
Your first goal should be at least 1,000.
We all saw what happen with the government shutdown in 2019. It’s ideal to have at least one to three months living expenses. You never know what the future can bring. Better safe than sorry.
7. The Budget Will Not Work
Have you come to the conclusion that your budget doesn’t work and you’re ready to give up. Seriously, you have to give your budget time to work. Our budget really didn’t get tight until we were six months in. I had to keep adjusting it to find our sweet spot.
There were months we went over our budget. Trust me it will happen but that’s ok. Just don’t give up.
At first, I started to become discouraged. Then I remember my WHY.
The moments I felt like giving up I pulled out my secret sauce “my why”. When your why is big enough you will keep pushing. I saw my family financially free, living a life not bound by debt.
This is the life I want for you and your family.
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Good read. I keep an expense log. I log a lot of my spending. Non-necessities that aren’t food i call “other” spending. My income is the biggest problem.
I agree the best way I have found to keep your focus when you are on a budget is to keep an expense log. It’s so easy to get out of control with your spending if you are not monitoring it daily.