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Why Budgets Don't Work and How To Fix It
by Terry J. Rigg Sr.
This article is for those families that have sat down at a desk or the kitchen table time
after time trying to develop a family budget that they can live with. Why don't they work?
There are several answers to that question. Most budgets are doomed from day
one because they are too complicated, don't have the commitment of all involved or
the numbers simply don't add up. The biggest culprit is that most people don't allow for
unexpected expenses. Let's tackle these one at a time:
Too Complicated:
When you list every expense you have on your budget you set yourself up for
defeat. Some budgets include such things as cleaning supplies, dog food, haircuts and
car gas. In order to keep track of all of these you would need a new box of
envelopes every month.
Answer: Streamline your budget. By simply including a topic on your budget entitled
"Household" where you can include everything you spend money on each month,
excluding bills. Groceries will undoubtedly be the largest expense in this category. By
taking the extra time to figure what needs to go into your household budget when you
set it up, you can save a lot of time each payday.
Commitment:
1. Many times the commitment to live by a budget is lacking.
2. People get into spending habits that are hard to break.
3. There is constant friction in the family over money.
4. It is more comfortable to live beyond your means.
Answer: You have to consider all of the above problems when setting up your
budget. The Family Budget is just that, the FAMILY BUDGET. Everyone in the family that
is old enough to count should be included. I don't mean to say that children should have
a say in where the money goes, but they should be aware of what the spending limits
of the family are. If you work closely with your spouse in developing a family budget
you both are more likely to stick to it. There is one other detail that will help. By setting
aside money for yourself and your spouse, that you don't have to account to the other
for, your budget is more likely to succeed.
The Numbers Don't Add Up:
You have more budget than you have paycheck. Generally, this is caused by not
being realistic in your budget. You try to make your paycheck fit your budget.
Answer: Start by listing your household expenses and bills. Then include 10% of
your income for long and short term savings. If this total is more than your paycheck,
you have to cut back. Start by looking at your household budget. Are there items that
you can do without? If you have money left over after considering all of the above, then
increase your savings.
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