The Top 5 Reasons People Don’t Follow Their Budget

Here are the top 5 reasons I find people don’t follow their budget.

5. Not having an accountability partner.  In order to follow a budget over the long term you must have accountability.  For married couples, you have a built-in accountability partner.  For single people you need to find someone that you know and trust to share with about your personal financial goals.  Your accountability partner should be on the same page as you about finances and be someone that you trust and respect so if they call you out, you will listen.

4. Having a budget that is too complex.  If your budget has too many complexities built into it, you most likely will find it to be a burden to follow it.  You may be the type of personality that enjoys details so having a lot of line items brings you joy.  However, this likely isn’t the case for most.  So, keep it simple and make a budget you will actually follow and track against.

3. Both of you are not following the budget (for couples).  If this is the case, you should get together and calmly discuss the budget together.  Go line by line and get agreement between one another on what the amounts should be for each item.  Even if one person “made the budget” then the other person should also agree on the budget.  It should be, at the end of the process, a budget for your family.  If one personal doesn’t agree with something they are responsible for bringing up their disagreement.

2. Variable expenses.  In our world, most expenses tend to be fixed.  You typically pay the same amount per month for most expenses.  However, the variable items that change monthly can be a budget buster for sure.  These types of expenses often include food, gas, utilities, and things that aren’t normal items (e.g., your car registration that is annual).  Ideally, you will work to fix these items to be the same amount each month.  Most utility companies will make it so you pay the same amount each month, for example.  For some items you may find it best to just build your base amount for a Financial Independence Fund and then know you will have the money when they do occur.  For others, you will need to look back and see what they are for the most part and make an assumption for the max amount then use that for your budget.

1. Spending Money.  If you do not have spending money, chances are you will not follow your budget over the long term.  The best way to head this off is to have what I call the “slush fund” in your budget.  This is an amount you take out in cash that you spend on whatever you would like.  Couples may take out a joint amount, a separate amount per person, or a combination of both types.  You can carryover your unspent slush money.  So, if you have more expensive hobbies then this can build up as a sinking fund for fun things you prefer that are more costly.  I personally do not have a preference what the amount you set aside is for this slush amount, so long as you are aware of where you are in the Financial Stages and you know how the amount you are allocating to this effects your goals.

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