So You Have A Budget Plan?
Good, but is it working for you?
So you’ve taken initiative and spent ample time creating a fantastic, future-proof budget plan, but you’ve noticed that there is a big, fat, minus sign in front of your final figures – what on earth could be going wrong!? Ladies and gentlemen, your budget plan isn’t balancing very well, and here are the reasons why and what you can do to solve them.
You Physically Spend Too Much
You’ve got your figured set up well, but you’re just not following through. In most cases, the people who end up in this pitfall are unaware of how much they’re spending on variable items – such as travel, leisure, food and most importantly nights out.
Focus On Your Main Budgeting Categories
There is no need to go to the extremes by categorising your expenses in sub-sub-categories, (a budget for gaming, a budget for alcohol, a budget for takeaways) no, no, no!
What you need to do is focus on having main categories such as food, expenses, savings, goods and pending purchases, with clear explanations of its purpose either in your head or on paper, detailing exactly what each category entails and is comprised of.
For me it is stressful to have 3 or 4 sub-categories for food, but far easier to have everything compiled under one bracket.
My budget for food a month is £140/$213, however this doesn’t mean that I spend £140.00 a month on food, but rather that I must not go over this figure. In this case, £140.00 a month is my budget for all my groceries including takeaways and meals out with family.
Things like alcohol I’d drop in the ‘goods’ category and treat it like any other purchase for myself that I would make outside or online.
You need not be concerned about whether your balance hits zero at the end of each month. In fact, you’d be better off if it didn’t as the money left over can be used as extra disposable income for yourself – or you could simply add what’s leftover this month onto next month’s figures – giving you even more money to spend from. This of course is only possible if you’re able to delay gratification without much difficulty.
You’re Inflexible With Regards To The State of Your Personal Subscriptions
For many people, the reason why their budget plans aren’t balancing in a positive manner is simply due to all the expenditures that occurs in their household.
Providing more clarity into the aforementioned problem – we are spending too much money on ‘unnecessaries’, which drives the figures sky high, leading us to take out credit cards and high interest loans to cover our mistakes.
I have been doing the budgeting in my household for the last 3/4 years – and by far, the main problem people have is with the direct debits that comes out of their account. And I’m not talking about the kind needed for paying bills like gas and electricity, but rather their very own personal subscriptions.
Know The Difference Between ‘Need’ and ‘Want’
Ideally what you want from a budget plan is something that reduces your debts and increases your savings, but the only way to reach that goal is through delayed gratification like I mentioned earlier.
If that means no more bi-yearly holidays because you’re financially unable to, then so be it. If that means no more PlayStation Plus, Xbox Live or premium make-up kits then be prepared to abstain from them as they could very well be the difference between whether you have a positive and negative balance at the end of the month. Cut them out, because you clearly can’t afford them. Think more about the difference between a need and a want, and spend your money accordingly.
Question Time: Do you have a budget plan? Has it worked for you? If not, what reasons do you think has contributed towards it and how do you plan to rectify this? Curious to step into your mind on the matter.
About the author
David Johnson Oragui is a balanced life practitioner, gathering people together to undergo a journey towards a balanced life that brings about ever-lasting happiness and excellence. His mission is to motivate and inspire as many people as possible to live their lives to the best of their ability through the idea of a balanced life. You can find him on Google + and Twitter.