Why Does Home Budgeting Never Seem To Work?

We are all familiar with budgets and the value of budgeting at home. Yet how many people do you know that actually manage to stick to their budget for more than a couple of months? Why is that? Why does home budgeting never seem to work?

We all create our budget with the best intentions. We seriously do plan to live by it, after all that’s why we created it right? You’re a responsible adult and you want to put some money aside for a vacation, retirement, or a rainy day. You’ve checked your budget over and it all adds up on paper and looks like it’s going to work just fine.

Then just as you seem to be getting into the swing of it, something breaks or some unexpected expense occurs and there goes the budget right out the window. And that’s the number one reason why budgets fail.

When you create your budget you know your monthly fixed costs like mortgage payment or rent, car payment, utilities, groceries, gas, entertainment, cable, and insurance. These expenses might vary a little bit from month to month but overall they are pretty stable. You don’t have to be a rocket scientist to budget for these expenses.

Nothing will bring your budget to a halt faster than expenses that you couldn’t foresee or didn’t count on. Just as things are starting to look promising your car decides to die and you land up with a $500 repair bill that wasn’t in your budget. Next thing you know you’ve spend rent and insurance money to cover the cost of the repair and your downhill slide escalates as you borrow from Peter to pay Paul.

Now you aren’t living in poverty but you don’t have a lot of disposable income either, so how can you stop the unexpected from crashing our budget? Well the trick is to anticipate these unplanned expenses.

Of course you aren’t going to know exactly how many or how much they’ll cost but you can estimate using the last 12 months expenses. Then take the total and divide it by 12 and that’s what you need to set aside each month.

It’s even better if you can take the expenses and break them down a bit such as auto, home maintenance, or medical. That’ way you’ll be able to tell where the majority of unexpected costs come from and then you can also see if there is a way that might prevent some of these such as preventative maintenance, or purchasing a prescription plan.

The total of these unplanned expenses can be quite a shock. There’s more of them then you might imagine and they do add up quickly. But you can prepare for them.

The money you are going to put aside to cover these expenses needs to go into a separate account that you can’t easily access. If you leave it in your regular account or you can easily access it you’ll land up spending it and you’ll be in the same budget mess you were before.

Now all that’s left is a little bit of luck. Hopefully nothing breaks down or no unexpected expenses occur until your slush fund has at least had some time to build. The longer you use this process the better off you’ll be! The fund will build over time and you won’t be left out in the cold the next time something goes awry.

Before you know it budgeting will work for you!

Deon Melchior is the Editor and Publisher of Article Click. For more FREE articles for your ezine and websites visit ArticleClick.com. Article Click is a free content article directory. This means that as a publisher you may reprint the articles that are included in our site, as long as the article is unedited and the author box is included with it's live hyperlinks.