Have you ever attempted to budget and given up in frustration
or discouragement? If you can figure out the reason your budgeting
attempt failed, you'll be able to institute a rewarding, successful
budget and stick to it. Think about it. What really determines
whether budgeting works for you?
One of the top reasons, if not THE top reason, so many people
fail at budgeting is attitude. If you think of it as a penny-pinching
sacrifice instead of a means for achieving your financial goals
and dreams, how long are you likely to stick with it? It’s
like the difference between going on a diet and eating healthily.
One is negative and restrictive; the other is positive and allows
you to indulge now and then and still achieve your goals.
Many people refuse to budget because of budgeting’s negative
connotation. If you’re one of them, try thinking of it
as a “spending plan” instead of a “budget.”
Once you’ve attempted to budget and failed, the bad feelings
associated with any type of failure can keep you from trying
again. Don’t give up! Why does budgeting matter? Money
is a tool that enables you to reach your goals in life, but
until you know where your money goes, you can’t make conscious
decisions about how to use this tool effectively. A budget shows
you exactly where your money goes and provides a spending plan
that lets you save for the things that are important to you:
a new house, a new car, a comfortable retirement, a college
education, travel, or whatever your particular goals and dreams
happen to be.
There are several universal budgeting concepts that every successful
budget will include, but one of the most important features
of a successful budget is customization to your needs. Don’t
try to force your lifestyle and personal situation into a generic,
one-size-fits-all budget. If a simpler approach makes it easier
to stay committed, then go for simplicity. If you stick with
a realistic, effective budget long enough, the rewards will
keep you motivated; in the meantime, do whatever it takes to
keep yourself going.
One important aspect of a successful, long-term relationship
is working towards common goals, and a budget is a means of
achieving them. Couples who can’t come to an agreement
about savings towards common goals should sit down and talk
calmly and rationally and come to a compromise to resolve this
disconnect in their relationship.
It’s okay to have individual goals that the other person
doesn’t share, and to provide for a way for those goals
to be met, but it’s critical to have basic common financial
goals that both people in the relationship agree to and are
motivated to work towards. If you can’t agree about saving
towards those goals, you’re going to be at cross-purposes
that are going to be a cause of ongoing conflict. A budget centered
around conflict and resentment is a budget doomed for failure.
If you still can’t figure out why your budget isn’t
working, consider the psychological factors at work. What does
money mean to you? Do you use it for reasons other than its
obvious purpose? Do you use it as a self-esteem booster, to
make yourself feel worthwhile? Do you enjoy the heady rush of
making a new purchase? Do you use it as a sign of power or control
in a relationship?
There are a number of good books about the psychological aspects
of money that can help you spot these factors and help you work
with them. See The Psychology of Spending Money.
If you jump into budgeting without a positive attitude about
it, chances are high that you'll give up before you've seen
the difference a budget or spending plan can make in your life.
The secret is to work on your attitude first.