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Why Your Budget is So High Maintenance

Odd Cents - Budgeting and Income

If your budget is too high maintenance, you may be putting your finances at a disadvantage. See how you can manage a budget that takes up all of your attention.

I need simplicity in my life. If there is a situation or event that causes things to change significantly, it unsettles me, and I cannot function. A good example of this is my budget. Right now, it’s a simple Excel spreadsheet with an easy to follow layout that I don’t have to do much with. I list all of the bills that are due, allocate funds to my savings accounts and highlight how much money I have to spend. Then, I create a copy of the tab for the next month.

That’s it.

I’ve tried to download and create more complex budgets that track my income and expenses. But somehow, I get turned off by the fact that it’s so high maintenance and I have to do too much to see if I’m screwing myself each month. If this is how you feel about your budget, I understand. Budgeting should not be a chore; it should be an exercise that you look forward to. It’s the engine that keeps your financial train running on the right track and on the right schedule.

If your budget takes too much out of you or the thought of budgeting makes you tired, it’s time to find out why you feel that way and how you can change it.

Reasons Why Your Budget is So High Maintenance

A high maintenance budget may be causing more harm than good. Instead of helping you to track your money, it makes it harder to stick to the budget. Also, you may be struggling because your budget is unrealistic; it’s not flexible enough or it’s too strict; you do not have any financial goals; you’re not budgeting within your means; you lack self-control; or you leave items out of the budget which throws the entire budget out of whack. These things can make budgeting really hard, and at some point, you will give up on it all together.

1. Your Budget is Unrealistic

Many people believe that any budget is better than no budget. This is not true. If you have a crappy budget, it will cause you more stress than what you had before you had a budget. All budgets should be realistic and must be tailored for you. Set realistic and attainable targets that you know that you can meet. Remember, when setting budgets, they should be SMART – specific, measurable, attainable, realistic and time-bound.

2. You Do Not Have Any Financial Goals

Budget for what? There are people who literally live pay cheque to pay cheque and are in a bind which makes it difficult for them to move forward. If you’re in this position, one of the questions you have to ask yourself is what do you want out of life? Do you want to buy a house; move into an apartment; take an online course or start a small business? By having a clear idea of what you want, you will see the importance of monitoring your money.

3. You Are Not Budgeting Within Your Means

If you think living above your means is a problem, then budgeting above your means is also a problem. The truth is that your budget should be based on the income that comes in each month. But there is sneaky little tool, that fools many people into thinking that they have money to spend. The credit card can be useful, but if you’re using it as a crutch to support wild spending, you’re digging a big financial hole.

4. You Lack Self-Control

You are not alone – this has happened to me in the past. I remember one Saturday in particular, NKM had a sale and I went absolutely crazy. I spent like there was no tomorrow. But when my credit card came, I saw all of the stars in Bridgetown. Never again. I made a promise that I would be more disciplined about money. I learnt a costly lesson that day. Although I was not spending hard cash at that point in time, I had to find cash to pay my card bill.

5. You Leave Items Out of Your Budget

Leaving items out of your budget whether on purpose or by accident can have serious financial consequences. It is a big shock to see this “unexpected expense” pop up when you’ve already allocated funds for the month. This could cause you to doubt the effectiveness of your budget. But I will disagree and say that it really highlights the need for a change to either how you budget or the type of budget that you use.

How to Manage a High-Maintenance Budget

If your budget is high-maintenance, then it’s time to take a few steps back and go again. In some cases, these types of budgets are necessary. But if you realise that it’s not benefiting you, it’s time to make a change. Some of the things that you can do to get back on track are keeping it simple; automating your budget activities; taking ownership of your budget; accounting for everything; and simply using your budget.

1. Keep it Simple

For me, the simpler the better. But this only works if your budget is an efficient system. Personal budgets do not have to be complex and you can create an easy-to-use plan for your money.

2. Automate your budget activities

If you have recurring line items in your budget, then you should consider automating the payments through direct debits. This is one less thing to worry about, but your budget ensures that it’s never too far from your mind.

3. Take Ownership of Your Budget

Who does this budget belong to? Then you have to be responsible for it. Spend the time to check it from time to time. If the format is not working, tweak it until you get it right. Make sure that your budget fits your needs.

4. Account for Everything

I admit that it’s not always possible to write down every possible expense under the sun, but there is a way to plan for them. The key is to include a line item for unknown expenses in your budget and have a funded emergency fund.

5. Use Your Budget

Your budget is there to guide your money decisions from day to day. If you’re unsure about how much you can spend, check your budget. Let your budget dictate what deserves your money and what can wait.

If you want to scale down your high maintenance budget, check the Resource Library for a free copy of the Simple Budget Worksheet. It’s an effective way to manage your money and keep track of your spending.

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