6 Reasons Why You're Not Sticking to Your Budget

Financial experts agree that using a budget is one of the major keys to money success. Nevertheless, millions of people don't bother to make one, often for one or more of the following reasons.

You're not keeping and tracking your receipts. In any basic budget, you have "buckets" into which you allot different amounts of money. For instance, you likely have food, rent, gas, and electricity buckets. The only way you can know if your spending is matching what you've allotted for every bucket is to keep your receipts and tally them up as you go. Many people overspend simply because they aren't aware of how much they suppose to keep. 

You buy based on emotion. Newsflash here: Marketers will steal your heart to get your money. They work extremely hard to get you to feel good about their products and services because they know that emotional responses are extremely fast and powerful. Your budget might suffer because, even though you've locked everything down on paper when push comes to shove, you're spending based on how you feel in the moment, not based on rationalizations. Don't underestimate the desire to please others with purchases, either.

You're too brand loyal. Remember those emotions? Well, they connect you strongly to particular brands. For instance, if your mom always drank Coffee X in the morning, then you might associate it with her comfort and help, and wisdom. You subsequently might choose Coffee X yourself, even if that brand doesn't taste that much different from a more generic version that's much cheaper. Do your homework and look at the ingredients, materials, and manufacturing process to see if you're spending more for items than you really need to.

You don't reassess for today's costs. A gallon of milk might have been $3.50 yesterday, but what about now? A host of factors from supply to politics and regulations can make prices drop or go up, so you cannot see a budget as something that is absolutely static. You constantly must reassess to determine whether the amounts you've allotted for each bucket actually will cover your needs based on current rates.

Your assumptions are wrong. Even though you can do research to figure out if you're dose to actual prices in your budget, sometimes, it's tough to make a call on what you'll spend. For example, you might guess that you'll use X kilowatt-hours of electricity but end up using Y. Your best bet here is to try to look at your average monthly costs for a given area over the past
few months. Then budget on the higher end. Try to be as informed as possible-assumptions are always based on the information you have in a given moment, so the more data you can get about a market, the more accurate your assumptions are likely to be.

You forget about surprises. Didn't plan to have your laptop die or have to visit an ailing relative across the country? Going over your budget is almost certain if you don't have some money set aside for unexpected costs. The tricky thing here is that, because these items are always surprises, it's very difficult to say how much you should put aside.

Personal Finance

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