money management plan

Top Reasons Why Your Budget Plan Is Not Working


If you know what debt is, then you also know that budgeting is part of the solution. Without a budget, you won’t be able to organise your spending – so you’ll end up having too much “month” at the end of your paycheck. Still, there are some people who create monthly budget plans – and still somehow manage to be broke by the end of the month. This is why you need to be careful how you create that budget of yours, so as to make sure that you’re not left in a bind.

Here are the top reasons why that budget plan you make every month may not be working for you:


You Didn’t Give It The Time

A budget, no matter how good it might be, might not work perfectly during the first few months. Not only do you need time to adjust to your income and expenses, but you also have to adjust your budget in accordance with your living preferences. Work on your budget for a bit and don’t be afraid of adjusting the numbers if needed.


Your Expenses Are Greater Than Your Income

If you have a net income (your income, minus necessary expenses) that’s a negative number, then it means you are spending more money that you are making. The problem here is not necessarily the income – but the way you decide to spend it. Review every category you have, and decide on the ones you would be able to live without.


You Didn’t Leave Anything For The Fun

When we create a budget, most of us forget to also leave some money aside for the occasional night out or entertainment. If you are on a budget, it doesn’t mean that you have to cut on your hobbies or occasional fun; it just means that you’ll need to decide firsthand how much you want to spend on those.


You Didn’t Budget Enough For Some Categories

Let’s say you made a list and already decided how much you’ll spend on some categories. However, if you see that those categories (food, gas, etc.) are always going over, you might want to increase the budget for that specific area. Keep in mind that increasing the budget somewhere means that you will have to decrease it somewhere else. Look for categories where you can afford to cut back on expenses.


You’re Cheating On Your Budget

If you cheat on your budget once, it’s not that big of a problem. However, if you do it on a regular basis, you should not be surprised that your budget is not working for you. You might be overstating your income or understating your expenses; however, by not sticking to a clear, well-thought-of budget, you’ll most likely have to dive into your savings to pay for monthly bills.

If you see that your budget is not doing you any justice, simply adjust it until it does. Nothing is set in stone. Therefore, if you need to cut something from a category and add it to the other, do not be afraid of doing so.

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