Why don’t people use a budget?
Here are some of the common reasons for not using a budget, and some tips and tricks:
It’s too time consuming or complicated.
In reality, budgets can be complicated, especially with most of the tools available to us, but it’s actually simpler than you think.
All a budget does is balance your expenses with your planned expenses and income, and there are tricks you can use to simplify the process even more.
For example, for incidental (daily) expenses, set aside a budgeted amount of cash to spend. When you are out of that cash wait until the next week to spend more money.
It takes this type of discipline to take the complexity out of budgeting.
I don’t know how to create one.
This is actually a good reason, most people are not taught about budgeting in school or at home.
Identify all of the bills (including debts) that you pay each month.
Put each into your budget.
Decide how much money you need for your expenses, like groceries, cars, gas, and spending money.
Cover those expenses in your budget.
Identify what you want to put your money towards (your goals.)
Put your goals in your budget.
Compare the monthly total of your bills, expenses, and goals to your plan expenses and net income and see what is left.
You now have a budget!
I have plenty of money left at the end of the month.
If you are saying this, you are successfully living on less than you make and that is the first goal of budgeting. Great job!
But if you were on a budget, how much more would you have left each month to direct toward your financial goals?
Using a budget can answer that question and get you more left at the end of each month.
I don’t want to be controlled.
Traditionally a budget has been thought of as a way to control spending using the budget defensively to control where the money goes
That is one key aspect, but a budget is also an offensive tool which directs your money where you want it to go.
These are two sides of the same coin, on the one hand a budget is used to control spending but on the other hand it used to work toward and achieve financial goals. In reality, a budget puts you in control of your finances!
I don’t care.
But what about these instances when you do care?
You care when your debit card is declined.
You care when your child needs lunch money and you can’t provide it.
You care when you can’t pay your utility bill.
You care when you see your credit card balances climbing uncontrollably.
I am afraid of what I might find.
Keeping your head in the sand is not going to make things better
Get your head out of the sand and start to get a good look at your finances
The best and quickest way to do this is by using a budget.
Do yourself and your family a favor; start to use a budget and follow it. Over time the problems noted above will disappear. When you budget and track your money, you know how much you have and how much you can spend.