Does it seem like your salary spends less and less time in your bank account every month before all those debit orders come off?
When you can’t even say hello to your income before you’re waving goodbye to it, it’s time to start budgeting.
But budgeting is hard, isn’t it?
There are many reasons why people don’t budget. Sometimes they think they just don’t need to, and sometimes they don’t want to know how much money they’re spending on things they shouldn’t be spending money on.
If these, or any of the reasons below, sound familiar, it might be time to kick-start your own budget!
1. They’ve got the wrong idea
Budgeting’s got a reputation for being too restrictive; you work hard for your money, why shouldn’t you be able to spend it as you see fit?
But it isn’t as terrible as it seems. In fact, when you stick to a budget, you’re likely to have even more money left over to do with as you please. Budgets shouldn’t be about making big restrictive changes. Rather, when you examine your finances, you see small ways to make changes that will have big effects. For example, if you and your partner are spending a lot of money on groceries every month (who isn’t, right?), you could consider opening a joint account that is solely for food. At the beginning of each month, both of you put a fixed amount of money in the account. That way, every time you swipe at the till, you’ll be more aware of how much you have left for that month. This will help you make better buying decisions, leaving you with more money to spend on things you actually want to spend your salary on.
2. It is intimidating
Got a vice that you don’t want to give up? Scared that if you make a budget you won’t be able to stick to it? There are tons of reasons you might fear drawing up a budget, but that shouldn’t keep you from trying! When you create a budget, you’re enabling yourself to find and fix the financial mistakes you make, rather than ignoring them and hoping they’ll go away by themselves.
3. It is time-consuming & boring
Unless you have a passion for spreadsheets, chances are that budgets bore you to tears. You might not want to budget because the actual act of budgeting just seems like row upon row and column upon column of money that’s no longer yours.
There’s no way around it – budgets take up time. However, there are ways to manage this time and make it easier. Rather than spending hours updating your budget once a month, do it daily or weekly.
You can also download apps to streamline the process such as You Need a Budget (YNAB) and Money Lover; some even link directly to your bank account, like 22Seven.
4. They think they don’t need to
In today’s economy, not many people can say that they don’t need to budget because they have enough money. Even if this is the case for you, a budget can always help you to save more. Remember that time you were hassled outside the shopping centre to donate to some obscure cause, and you agreed to a monthly debit order because you didn’t want to be bothered anymore? Even if you don’t remember that, your bank account does! When you look at your budget, you might be surprised at some of the things you’re spending money on, such as high premiums for car insurance, and you can then make the switch to a more affordable vehicle insurer to save money.
5. They think a budget can’t help
Most of us have heard the adage ‘the first step to recovery is admitting there’s a problem.’ Debt is a very personal issue and it can be difficult to admit, even to yourself, that you have a financial problem in the first place. Often, by the time you realise it, it can seem like there is no solution. However, that’s simply not true. There are a variety of ways to help clear your debt, and although it’s a basic one, drawing up a comprehensive budget is the best way to start doing this.