As a financial coach and blogger, I receive a lot of questions, comments and concerns about creating and sticking to a monthly budget. And often times people give up with creating one because they don’t get the results they were expecting. If this sounds like you, keep reading because your budgeting breakthrough may come by the end of this post. There are three common reasons as to why you are not able to stick to your monthly budget and I have provided them below.
#1: You Don’t What A Budget Truly Is
A monthly budget is nothing more than a planning tool that helps you create the lifestyle you desire by planning out how you will use your money within a given time period. Nothing more, nothing less.
Often times, I hear that creating a budget is restrictive and draining because it tells you what you can’t do with your money. I am here to tell you that if you feel or have felt this way, you were not budgeting correctly. If you can use a calendar to plan out your month, you can use a budget to plan out your payments.
#2: You Don’t Know How To Properly Create A Budget
Over the last 7 years, I can confidently say that I have used every budget template on the market and the only one that my clients and I absolutely swear by is a zero-based budget. It is a unique budgeting format because it allows you to assign 100% of the income you earn in a month to the monthly expenses you have to pay that month without dipping into what you already have saved in your savings account.
When done properly, your take-home pay minus your expenses will always equal zero (hence the name). So, if you are expecting to earn $2,500 this month after taxes and deductions, you will assign all $2,500 dollars to the monthly expense categories in your budget. I sometimes say to think of the zero to mean you have zero dollars to blow each month because every dollar that you receive has a job to do!
#3: You Don’t Recognize The Benefits of Budgeting Each Month
Let’s chat for a moment about the benefits of budgeting your money each and every month. That way when I meet you at a speaking event or within our Financially Free Society Facebook Group, you have no excuse as to why you haven’t created one.
The first benefit is you can clearly see your monthly income and expenses. You may be aware of how much you earn, but not how much you are spending within a month. This method allows you to clearly and quickly sees everything you need to pay for during the month, down to the dollar.
Also, it enables you to save and/or invest some money each and every month. Not only will your monthly budget include all of the monthly living expenses you need to pay for, it should also include saving and investing categories to ensure you are contributing to them monthly, as outlined in your financial plan. And don’t worry, saving and investing are going to be discussed in great detail in the posts to come.
Now I want to hear from you…
Question: Around what time of the month do you typically noticed that you have blown your budget – beginning, middle, or end? Leave your response in the comment section below.