There are hundreds of individual ways to budget. In my family, for example, we put almost everything on our credit cards. Then we pay them off in full every single month. This is because our bookkeeping is dependent on a paper trail, and I like to check my receipts against my credit card bill each month in case one was lost.
Other people find they do better to use cash as their “fun money;” when they run out of cash, they’re done spending for the day or week. Another person I know carries a notebook to track spending and set limits. Whole segments of the population don’t budget at all, and simply fly by the seat of their financial pants.
Given the different way people manage, or don’t manage, their finances, what one tip would I give anyone? Choose a budgeting method and don’t give up.
Common Budgeting Failures
There are two main ways people fall off the boat in their budgeting. The first is the person who sees that their finances are out of control. This person says to himself, “I’ve got to get on track.” So for about a month, he is very disciplined about his bookkeeping. But once he gets his next bank statement, and sees how much better he did, he relaxes. Thinking that everything will stay under control without having to work so hard, he stops thinking about it, and I think we can all see where he’s going to end up sooner or later: right back where he started.
The other person is one who has usually been pretty good about budgeting. But for some reason, she falls off course. Maybe she took a vacation and didn’t want to stop treating herself when she came home. Maybe she starting making it too easy to make exceptions in her budget: “But I needed that new jacket. And the purse. And the shoes.” But for whatever reason, she wakes up one day to find that all the small financial transgressions have added up and now she’s missing her private health insurance premium payments. Knowing how hard it is to be disciplined, she dreads getting back on track and simply doesn’t get around to fixing her budget.
In a separate little category are those who have never given a budgeting method a more than a moment’s commitment. They may think about how they’ll do it, read about it, even put it on paper, but they never put it into effect in their real lives at all. It just seems too overwhelming to move from plan to action.
How to Succeed with Budgeting
In every case, people need to choose something they can live with and then stick with it. Don’t give up. You’re likely to fall off track at one time or another; we all do, because not every expense can be pre-planned. The numbers will not always work out the way you want them to. You may have to adjust if the method you chose genuinely isn’t working, but we all know the difference between a change of approach and just making excuses for giving up the attempt.
The same advice goes for any Frugal Living tip: if you try using coupons for a week, that’s better than nothing. But the real power of saving money is in how it adds up over time. And that means that to see the best results, you’ve got to stick with it.
So to those who have never tried to budget: now is the time to start. And to those who are struggling with a budget: you’re not alone. Everyone is going to fail at some point in their budgeting. What matters is how you recover.