Why Budgets Fail
Fort Lauderdale FL, – A budget is important part of managing personal finances; however, many consumers avoid this task because they think it’s too hard or a budget will stop them from enjoying their life. A budget isn’t supposed to restrict or punish. It’s a spending plan that will help people achieve a stable financial future. So why do budgeting efforts fail?
Many consumers treat their budget like a diet. They treat a budget as if it’s a temporary fix, where they watch their spending habits until they hit their financial goal. But once that goal is met, the person goes back to their old spending habits and a few months later they’re back to where they started. “You create a budget because you want to make changes for the better,” says Howard Dvorkin, CPA and chairman of Debt.com. “If you give up, you’re right back where you started.” Budgeting is a lifestyle choice, it’s a part of an individual’s everyday life and guides one to make better financial choices.
A budget helps identity where someone wasting one’s money, and helps the people modify his or her spending habits to be more balanced. By cutting out the wasteful spending and watching expenses, people will be able to save money for the important things in life: a home, a new car or even retirement.
Some consumers think that a budget won’t fit into their normal life; that weighing and measuring the dollars spent just isn’t a practical, long-term strategy. However, with the Internet and debit cards, it’s easy to keep track of spending habits. Most banks will let consumers export their banking statements so that they can categorize their expenses and keep track of where their money is going. Additionally, there are many online tools to help consumers budget better. “We’ve launched PowerWallet for Debt.com to help consumers get control of their budgets,” says Dvorkin.
Lastly, many consumers assume that budgets are rigid, inflexible financial plans. That once someone makes a commitment to a budget, it can’t change; but any eating plan or budget that holds to strict, inflexible rules will not last under the test of time. A healthy eating plan and budget needs to be flexible for one’s lifestyle.