The article below is written by Natalie Taylor – Head of Financial Consulting at Monarch Money.
Have you ever set a budget but found it difficult to stick to?
Here are the most common reasons budgeting fails and what I recommend instead.
Natalie Taylor has 17 years of financial planning experience.
Budgeting without clear goals
A budget helps you spend less than you earn and figure out how much you can save and invest.
For example, budgeting because you feel like you should spend less is very different from budgeting because you want to buy a house in the next two years.
Forget to budget for unusual expenses
Extraordinary expenses are things you don’t have to pay for every month, including auto insurance, hospitalization, home repairs, travel, etc. Most of us think about budgeting monthly, so it’s very important to
To plan for unexpected expenses, take a few minutes to add up all the expenses you expect to spend next year.
Don’t budget for entertainment
Although my job is to help clients achieve certain financial goals sooner rather than later, I also strongly encourage clients to create a budget so that they can enjoy life along the way.
For some customers, adding `fun` as a category in their monthly budget gives them the freedom to spend on whatever brings them joy.
Some people just like to set aside a little money from their food budget to spend on entertainment.
The wife does not agree with the husband
One of the most controversial issues between couples is spending.
One of the most important things I work with clients on is helping them align their financial goals so that we both feel on the same page.
Above all, know that budgeting takes practice and experimentation.
