Is Your Budget Realistic and Successful or a Failure?

Kimberly Watson, Editor in Chief
July 26, 2012 /

The usual complaint related to failing budgets is that they do not work! This then leads to many people being frustrated rejecting the idea of trying to control their personal finances. This is usually a self induced fallacy because, if there is some knowledge and the desire to make your financial world work for you then it can be achieved.

Generally, the reason for failing budgets is that they are unrealistic; they were not given proper consideration or not implemented correctly. Another reason could be that they were rejected too soon without the opportunity to prove successful.

Unrealistic budgets are failing budgets. They could be de-motivating as there is little chance of them succeeding. Generally, such budgets are an attempt to fool yourself by making various numbers look great on paper and giving a temporary euphoria. However, simply put, if you have not completed the sums diligently and seriously and related your expenses to income then you should perhaps re-focus.

A reasonable and workable budget must reflect your spending patterns fully. Everyone has determined expenses that are usually paid automatically. They could apply to car payments, insurance rent or mortgage, utilities and others.  If you cannot change or influence these amounts then do not put lesser figures as this is the path to failing budgets.

A realistic approach must be incorporated into the design of your budget. Again, do not paint pretty pictures as you are doomed to failing budgets. Realistically, a budget should be designed for preventing you from wasting your money, not from spending it! It is a finance management system and will show you how you are spending your money either irresponsibly or on items that have not been planned for.

Determine where you are spending and when related to the necessities such as food, compare the sources and their relative costs. Do not collect too much data because it is not needed. Primarily, be aware of where, and on what you are spending your hard earned cash and then perform a quick analysis and determine how and where you can save. At the end of the day it all revolves around basic arithmetic and not failing budgets.

One final thing is that as with everything else that is worth doing and brings rewards, so it is with your budget. Persevere and you could have a pleasant financial surprise after a relatively short time.

 

 

 

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