Budgeting can be a trial-and-error process. It’s not unusual to make a budget only to find out later that it isn’t quite working. Here are some common reasons why this could be happening to you.
Underestimating Instead of Overestimating
Some expenses are harder to budget for because their costs vary by month. Utility bills for gas and water are good examples. In cases like this, you may be underestimating how much you’ll need to pay for a given month. When in doubt, always overestimate how much something will cost. If you have any suspicion that your water bill could be a little higher than what you’ve originally planned for, it’s best to assume it will be—just to be safe.
Look over your budget and compare it to your bank statements. Have you taken everything into account? Make sure you’re not forgetting to factor in gas for your car, vehicle maintenance, and pet/animal expenses (if applicable).
You may be breaking your budget without even thinking about it. Budgeting requires that you to keep a close eye on how much you're spending and where. Otherwise, you may soon find that you’ve forked out more than you planned to. While tracking may not come naturally at first, you just might turn it into a habit with a little effort.
Going over your budget by accident is one thing; going over it knowingly is quite another. Many a budget has been broken by the inability to tell oneself “no.” Here’s the thing: Budgeting isn’t meant to be easy. It requires saving now so you can have more later. This means you may have to make a habit of denying yourself some luxuries in the meantime. One of the most common pitfalls: food. Resist the temptation to get that impromptu treat at your favorite fast food restaurant. If a friend unexpectedly asks you to go out to dinner with them, consider inviting them over for a home-cooked meal instead. And, as always, try not to go shopping on an empty stomach!
Adjusting Your Budget
It could be that you simply need to make some adjustments to your budget. If you’re taking all of the above suggestions into account but still aren’t saving as much as you’d like, think about cutting out some unneeded expenses. Take a look at your music/entertainment subscriptions and ask yourself if you can temporarily do without them. If you have two separate budgets for groceries and eating out, consider combining them into a single category and lowering the amount you’ve allotted for food in general (if possible). Another idea is to try out a different grocery store to see if they have lower prices than your regular grocer.