4 Reasons Your Budget Isn’t Working How You Want It To

 Perhaps the most common piece of financial advice is to create a budget. But the very word “budget” can elicit any number of negative reactions, from an eye roll to a shudder. Why? Because so many of us have tried to budget only to have our high hopes dashed when it didn’t work how we’d have liked it to.

Here are four common reasons your budget may be struggling to get off the ground. Knowing which pitfalls to avoid can help you create a budget that finally — finally — works.

#1: Your Budget Is Overly Strict

An overly restrictive budget is akin to an overly restrictive diet; it becomes all too easy to become frustrated with the rigidity and splurge.

One blogger for Lifehacker reminisces about the time they built a budget that “allocated zero room for fun, indulgences, or discretionary spending.” The result? The budget backfired, big time. This person began to feel any discretionary purchase completely negated their budget, which led to a spending spiral.

Overly strict budgets are also exhausting because they require so much more time to fill out. It’s easy to become resentful of this obligation and quit altogether.

Try instead to build a flexible, dynamic budget geared towards your goals — but with wiggle room for some fun and entertainment, too. The key here is making something sustainable.

#2: Your Budget Is Missing Some Information

It tends to be easier to plan for fixed expenses — rent/mortgage, car payment, utilities — than it is to track variable expenses. This is especially true in the case of one-time expenses. But your budget is not realistic nor complete without a snapshot of all your spending.

The Motley Fool recommends breaking down one-time expenses into monthly line items on your budget. For instance, say you’re anticipating you’ll spend $800 on holiday gifts this year. Instead of trying to shoehorn that entire amount into your monthly November and December ledgers, budget for $67 per month throughout the year. Then tuck that amount into a designated savings account. By the time holiday season arrives, you’ll have the total amount ready to go without having to take on any debt or siphon money from other causes.

#3: Debts Are Overwhelming Your Budget

Are you having trouble budgeting due to debt? Sometimes it can get overwhelming trying to juggle debts with your other living expenses — especially if you’ve already trimmed off as much “fat” as possible, only to find yourself struggling to stay afloat.

As debt expert and Freedom Debt Relief co-founder Andrew Housser notes, “Not everyone can just tighten the budget to pay off their debts.”

Get a plan for assertively paying down your debts. If you decide to go the do-it-yourself route, you’ll want to free up as much money as possible in your budget and target your debts one by one until they’re paid off. Remember to budget for minimum payments on all your other accounts every month to avoid delinquency, though.

You may find you’re hitting a wall with your budget because you simply need help paying off your debts. In that case, look into debt management, consolidation or settlement as potential solutions.

#4: You Need to Define Your Financial Goals

Budgeting for the sake of budgeting can quickly become boring. What you’re missing is that rush of hitting your money goals — like saving enough to pay for your dream vacation in cash, filling up your emergency fund and amassing that down payment for your next vehicle.

Set specific, realistic financial goals and use them to drive your budgeting decisions. It’s easier and more enjoyable to save when something tangible is at stake.

With a few simple adjustments, you can avoid these pitfalls and get your budget working in your favor.