Why is my budget always failing? That’s the #1 question I’m always asked, and I can usually answer it once I know the answer to the following question, “Do you know your numbers?”
To which you might reply, “My numbers, what do you mean?”
Knowing your numbers is the #1 way to fix your budget, but it’s not as simple as it sounds. It is the most hated step in the budgeting process because it takes the most amount of time. Sure, you can simply this process, which I’ll talk about later, but to get the ball rolling, you’ve got to be willing to roll up your sleeve and get down and dirty with your spending.
If I asked you…
*How much did you spend last month on eating out?
*How much did you spend last month on gas?
*How much did you spend last month on travel?
*How much did you spend last month on groceries?
*How much did you spend last month on clothes?
Would you know the answer down to the penny?
If you don’t, let’s fix that.
You see, budgets are only as good as the information you put in them. That is why most people hate budgets because they are always lying to them. It says you are supposed to have $500 left each month, but when you get to the end of the month, you are somehow in the hole $200 and can’t figure out why this happened. Without a system in place, you simply repeat this process over and over again without actually getting anywhere.
You know the definition of insanity…it’s doing the same thing over and over again.
When you know your numbers (aka what you are spending your money on each month) you have the power to make decisions that can’t make when you don’t know these numbers. You can decide how much you want to spend on what and make a plan for boosting your savings. There’s no secret to saving money even on a tight budget. You’ve got to have a system in place that allows you to REALLY dial in your budget and be confident in your numbers. Even just small little changes in your budget can lead to savings each month. It’s true, I promise!
You don’t need a lot of fancy tools to build a budget. Here are some tips on a DIY Budget vs. using Budgeting apps that might help you as you begin to better your budget.
Action Step #1
I want you to download all of your bank statements and credit card statements from the previous month. Any account where you’ve paid an expense from is what you are looking for. It’s easy to download statements online from any account.
Action Step #2
Download my free Variable Expense Tracker form and save it to your computer to use each month. Click the image below to download.
Action Step #3
Once you’ve got those statements, I want you to scrub through them all and add up your total expenses for each category on the Variable Expense Tracker form. If you have additional expenses that aren’t listed, you can simply make a new column for yourself, or recreate the document easily in Excel.
Input each of those numbers in their category and see if you notice anything. Are you overspending in any category? Were you under spending in areas you were surprised by? How do these numbers compare to what you put in your budget?
Action Step #4
Budgeting again is a process. Although we’ve tackled the #1 reason budgets fail, there are many more steps in creating an easy-to-use no fail budget. Sign up for my FREE e-course, Jedi Mind Trick Your Budget, so you can learn all the tips and tricks that I’ve used over and over again to budget in the good times and not so good times.
Here are some additional resources and articles I’ve written about budgets that will help you once and for all master budgeting!
Shannah Compton Game is a podcast host and CERTIFIED FINANCIAL PLANNER of the top-rated Millennial Money podcast. Millennial Money has over 6-million downloads in 164 countries. Shannah’s years of experience as a skilled Certified Financial Planner have set her on a mission to revolutionize how people think, act, and feel about their finances…and have some fun doing so.