How many times have you tried doing a monthly budget, but you still come up short? No matter how hard you try, you still end up with more expenses than money on hand. There are a lot of reasons why this happens. It is important that you understand why this always comes up as an issue so you can correct your mistakes in the future.
Prices are not always the same
In doing a budget plan, you might try to be very exact with the amount you write. You base this amount on the previous prices that you know of. The truth is that prices are very fluid. They keep changing. The price that you know of previously is not the same amount weeks after. This is why it is important for you to not make a conservative estimate. Try to overestimate if possible so that you will have extra money in the event that the price is lower instead of the other way around.
You don’t save money for emergency purposes
You have to understand that there are things that don’t go your way. Someone might suddenly get sick and you have to spend money as your insurance doesn’t cover everything. It is also possible that you have a friend whose birthday is coming up and you were invited. You have no choice but to buy a gift and this was not included in your budget. This is exactly why you need to place emergency funds on your budget. You don’t know what could happen in a month and it helps a lot if you are prepared.
Account personal improvement funds
Life is not a cycle. You always have the need to go up. You have to find ways to improve yourself or do better at your job. This is why you buy new clothes to look great in the office. You take up extra courses or online webinars to improve on your chosen field. All of these personal improvement programs come with a price. It is important that you include them in your budget. For instance, you might be invited to go out on a trip with your boss and this is your chance to sell yourself. It comes with expenses, but this is an expense worth the risk.
You always treat yourself
Even if you have a budget plan, you will always stay away from it especially if there is something that came up and you really want to bring it home. For instance, you have seen a cute dress that has gone on sale. It is not on your budget but you don’t want to let go of the chance so you have decided to buy it. You might have also done a great job at work and you have decided to treat your friends for dinner. These things always happen and so you end up short with your budget.
The best solution to this problem is to not be conservative in making a budget plan. Try to blow it up so you have enough money for the rainy days.
Featured and 1st image by phanlop88/freedigitalphotos.net
2nd image by photostock/freedigitalphotos.net