If you are looking forward to becoming financially healthy in the future, the first step you need to take is creating and keeping a budget. However, it’s not as easy as it may sound. Many make the mistake of thinking that by simply having a system, everything will be good. The truth, though, is that it’s just the beginning.
Budgeting is just a set of guidelines that can help you manage your money, but if it doesn’t work, you can’t keep following those guidelines and instead work on creating a new one. In this post, New Wave Financial Planning shares some of the most common struggles of beginners at budgeting, plus some budget advice that you can follow.
Budgeting Challenges and How to Overcome Them
Trying to Track All Your Expenses
Many think that you need to track every single expense. But this is extremely hard and, quite frankly, unnecessary, especially if you don’t have an automatic budgeting system. This can be tiresome and would even make you dread the idea of doing your budget. While it’s important that you get a clear picture of all your expenses, if you cannot track every penny that goes out, that’s fine. You can simply categorize your expenses into these, for instance:
- Debts or loans
- Car Payment
- Charity
- Childcare
- Groceries
- Insurance
- Entertainment
- Utilities
- Savings
- Transportation
If you’re spending significantly less than you’re earning, it’s OK to skip tracking impulse purchases every once in a while. But if you tend to overspend, then you should set a stricter budget.
Finding It Hard to Budget with Cash
You might not realise it but paying in cash actually helps you spend less. That said, it’s also harder to track your expenses when you spend cash. There are methods that you can try, though:
- The Envelope Method – get your spending money for the month from the bank and separate them into envelopes according to the category they belong to. Make sure that you stick to the amount that you allot for each spending category.
- Paper Clipping – if you prefer putting your money in your wallet instead of carrying multiple envelopes, you can simply paper clip your bills and add sticky notes so you know what the money’s for.
Failing to Stick to the Budget
One of the hardest things to do when budgeting is sticking to it! You see, you can plan for it, track your expenses, but if you keep on exceeding the amount to spend that you have set for yourself, it won’t really work, would it?
Self-discipline is key to any successful budget plan. Think of ways on how you can minimise your unnecessary spending, which could be ruining your budget. For instance, if you tend to shop impulsively online, you could consider uninstalling the shopping apps! Or, if you overspend when you do grocery shopping with your credit card, consider switching to cash.
Conclusion
These are just some of the most common struggles of people who are starting with a budget plan. Many experience these, so if you, too, find yourself having trouble with these challenges, know that you can overcome them. You should also consider getting budget advice from a trusted financial advisor in your area who could guide you and help you determine the best budgeting strategies for your particular situation.
New Wave Financial Planning offers you the services of the best financial advisors on the Gold Coast. Contact our experts now to find out how we can help you!
