No matter how serious you are about creating a budget and sticking to it, an unreasonable goal here and a little overspending there can spoil your budgeting plans quickly. This article from U.S. News outlines five reasons why following a budget can be difficult, and offers some advice on how to overcome those challenges.
Making a budget is easy compared to following it. Maybe that’s why so few people even bother creating one.
For instance, last year’s Consumer Financial Literacy Survey from the National Foundation for Credit Counseling found that 2 out of 5 adults have a budget and keep close track of their spending – meaning 3 out of 5 adults say, “No thanks, not for me.” A 2013 Gallup poll made a similar conclusion, finding that 2 out of 3 Americans don’t budget. And you probably have your own anecdotal evidence, whether from personal experience or just seeing friends and family struggle, indicating what everyone knows: Budgeting is right up there with dieting, training for a marathon and learning to juggle.
But why is following a budget so hard? Let’s count the ways …
Budgets restrict you. You are a caged bird. You are a country under a dictatorship. You are an overpriced sandwich. In other words, you want to be free. Budgets try to control your spending, and perhaps you don’t want to be controlled.
“People struggle following a budget because it is restrictive and time consuming,” says Peter Lazaroff, a wealth manager with Plancorp, a wealth management firm in St. Louis. “Traditional budgeting forces you to make every decision as if you live in a spreadsheet. But guess what? You don’t live in a spreadsheet.”
“The tough part of budgeting is that you just never know what will come up,” says Bianca Lee, owner of White Rose Marketing Solutions in New York City. “And something always comes up. The girlfriend’s trip to Mexico, a speeding ticket, vet bills for the cats … It’s impossible to plan for everything, and if it were possible, it would make for a super boring existence.”
None of this means that it’s fruitless to attempt to budget, but clearly, you have to come up with something that works for you, your lifestyle and your income.
You lack financial education. It isn’t your fault; blame your school. According to the Council for Economic Education’s biennial survey, last released in 2014, 17 states currently require that students at public high schools take a personal finance class before graduation, but only six states actually test the students on personal finance concepts. Sad as this is, it’s a huge improvement on previous years; before the recession, hardly any state mandated personal finance classes in schools. But, still, plenty of children are currently not being taught the basics of personal finance like budgeting, which translates into adults who still don’t know how to budget.
You’re too emotional. Don’t feel bad. Just about everyone is too emotional to maintain a budget. You almost have to reach into a TV series to think of people, albeit fictional ones, who budget well.
“Budgets are made with logic. Purchase decisions are made with emotion. We buy things based on how we think they will make us feel. So budgets and spending are incompatible,” says a sympathetic Martin Hurlburt, the Salt Lake City co-founder of T.M. Wealth Management, which also has an office in New York City.
That budgeting and spending are incompatible doesn’t mean you can’t budget successfully, Hurlburt says. But everyone has a unique money personality, he says, and it helps to understand how yours works.
“Without addressing this primary issue, most plans are doomed to fail as soon as they are written. Because they don’t address what drives our money choices,” Hurlburt says.
