Do you feel like it is an ongoing battle between you and your budget? And do you feel like your budget is winning? Budgets are not foolproof – which is why it is a good idea to revisit them with an open mind, at least once a quarter.
Here are some reasons why budgets fail:
It’s not you. It’s me (the budget)
I can’t think of anything less motivating for long term goals than “failing” in the short term. Understand this though; there is a solid chance that you’re not failing, but that your budget isn’t realistic or comprehensive enough. Don’t give up before you’ve even started! Just adjust your budget.
What goes up……
How much is your budget dependant on variables like interest rates (i.e. credit cards or mortgages)?Are you subject to high interest rates, is your mortgage attached to a variable rate, or have you recently renewed your mortgage for a higher rate? While rates in general are very low at the moment, they are a factor in your ability to pay down debt and cash flow. This could be eating away at your bottom line without you even realizing it.
Applause for developing a super strict budget that is going to put you on the express train towards your financial goals. Now a couple of months in, you realize that what you have on paper is in no way in sync with how you live your life.
If you are struggling with extreme changes, start small (pick one sacrifice or change a month). Adjust to that, and then on to the next. It’s easier to absorb.
If you don’t have a goal in mind, no kidding you’re going to feel like a budget failure. How do you even know where you are at?
Identifying specific short, medium and long term goals is essential to not only getting you where you need to go, but in allowing you to mark your progress along the way.
Are you wondering how you might be able to improve your financial situation by getting your budget under control? Is your debt standing in your way? Creating a budget may seem simple, but making it effective is certainly not easy. Call one of our trained credit counsellors 1-888-826-5898 or check out our free online debt analysis tool to get started.