Budgeting is a great way to set and achieve financial goals. However, it is a great challenge to some people.
Some have their budgets ready but have failed to stick to it. Some adhere to their budgets but only momentarily. Others do not start budgeting at all because it seems difficult.
Apart from tracking your income and expenses, budgeting will help you to;
- Plan for future expenses.
- Have control over your finances.
- Put a check on wasteful spending.
- Lower present and future financial pressure.
- Track your financial growth.
Budgeting is an important part of your financial life. Unfortunately, many see budgeting as an extra work and shy away from it. In this article, I am going to discuss some reasons budgeting is difficult and how to tackle them.
1. Income problem(Budgeting more than you earn)
Sometimes, the problem with budgeting is low income. Having an income that is lower than your expenses makes budgeting difficult and frustrating.
In this case, you will have to make most of what you have by prioritizing effectively. Make sure essential needs gets sorted out first. Your budget can be adjusted to accommodate major expenses. You also do not have to worry about saving much. The most effective solution is looking for ways to boost your income.
2. Using a wrong budgeting practice
Various budgeting practices can work for different individuals. These budgeting practices can also be adjusted to meet your needs.
One of the popular practices is the 50/30/20 rule, where 50% of your income is mapped out for needs, 30% for wants, and 20% for savings or debt repayment. There is also “zero-based” budgeting where you can start from scratch each budgeting period.
Other budgeting practices are Reverse Budgeting, Paying Yourself First, and Envelope Budgeting. You can try out different methods and decide which one best suits you. You can also adjust some areas of already existing methods to suit your goals. For example, in the 50/30/20 practice, you can decide to save 15% instead of 20%.
Choosing the right budgeting practice depends on financial stability, personal preferences and goals. Finding the right practice for you will make budgeting easier.
3. Unforeseen expenses
Of course, there are times when unforeseen expenses can arise and there is no room in your budget to accommodate them. This can be solved by allocating a portion of your income to an emergency fund.
However sometimes, even after preparing for unforeseen future expenses, it is not enough. This can disrupt your financial goals and budget but should not discourage you. You should not stop budgeting because of a challenge like this, rather it is a time to be consciously consistent.
4. Budgeting with the wrong mindset
Budgeting can look like a restriction. I mean, if you sweat and make your own money, why can’t you get to freely decide on what and how you spend your money? This is how some people feel about budgeting.
Budgeting with the wrong mindset can be discouraging, especially if you’re not used to keeping to a budget.
5. Fluctuating income
Everyone does not have a steady income. Budgeting can be stressful when there is a fluctuation in the the income flow. Here are some tips on how to budget with an unstable income:
- Find a way to calculate your average income. Track your expenses, both fixed(for example, housing, groceries) and variable(for example, personal care).
- Use a flexible budgeting system. It will help you make necessary adjustments. For example, saving more when the income is high and saving less when the income is low.
- Save for emergencies. You can keep some money for emergency expenses; this will help you reduce the stress of unforeseen expenses.
- Don’t stop budgeting, focus on the big win.
6. You just won’t start
Sometimes the lack of willpower to create a budget is the true reason it appears so difficult. You can seek counsel from financial advisors, they can assist you in selecting a simple and adaptable budgeting method.
Generally speaking, sticking a budget calls for some discipline. Keeping your budget real, clear and flexible makes it easier for you. An unrealistic budget can only make you frustrated.
Here is a winning tip, sometimes it is necessary to keep a portion of your income to take care of yourself. Go treat yourself to your favourite food or get something you’ve always wanted. Doing this eases stress and gives you the encouragement to continue.
