Let's
Be Real
Too often we set ourselves up
for failure with unrealistic goals. This may be a result of juggling expenses
in our budget to make the income equal the expenses. But, if that target is just
a guess, it is probably the wrong number. We find out the hard way when there
is a week left to go in the month and we have already spent our budget of $200
for groceries.
This means we set up the
target and we missed it. That does not mean our budget will not work. It just
means we need to set a more realistic target. This is no time to quit. Rather,
it is an opportunity to make adjustments and keep moving toward our goal of having
control of our finances.
Do Not Be a
Quitter
You have put a lot of time and
effort into the creation of your budget. You have worked hard in maintaining the
tracking of your income and the money you are spending. Months have gone by and
yet you still seem to get to the end of your money before the end of the month.
Do not let your frustration tempt you into giving up. It would be the wrong thing
to do.
If you were driving to Disney World
and half way there realized that you had made a wrong turn, driving 50 miles off
your planned route, what would you do? Would you quit and go home? Of course not.
So why should we give up on a budget just because everything does not work perfectly
the first few months? Do the same thing you would do on your vacation. Look at
your map and adjust your route to find the best way to reach your destination.
Make the adjustment and move forward.
No
Torture Here
Too many people think
that a budget is something to keep them from spending money, and that is wrong.
It is not a straight jacket. A budget is a tool to provide you with information
to manage your finances. The knowledge you gain by tracking income and expenses
will help you get the most for your money. In fact, a budget can help find money
that you can spend where it will give you the most enjoyment.
Successful
Solutions
Fortunately, all three problems
can be corrected with the same answer: Use the budget as a management tool. Each
month your budget will show what you planned and actually earned and spent. That's
valuable information. The trick is to see where the actual number was significantly
off the expected number.
Once you have
found a big difference you can begin to analyze why it happened. Was there a big
one-time expense this month? Maybe you committed the first mistake and just guessed
at what you would spend. It also could be that you have been spending carelessly
on groceries. If that is the case, you would look to find some savings this month.
Each
month work on the biggest differences until the whole process runs smoothly. Just
take on one or two at a time. Each month you should get closer to actually having
control over your finances. After awhile, it is just a matter of checking to make
sure that everything is roughly on target and making minor mid-course corrections.
Now
that is not to say it is easy to resolve those differences, sometimes it's not.
But, it's always easier when you have some clues to help point you in the right
direction. With the information that your budget provides, you know where to look
for possible savings. Often that is the difference between frustration and success.
It
is always a shame when you work hard and do not get any benefit from your work.
Do not let that happen to your budget. It takes much less effort to fix a budget
than to start one. You already have put in the hardest work. Take the time to
get the benefit. You deserve it.
For more information regarding this topic or any other tax-related issue, please call The Henssler Financial Group Tax & Accounting Division at 770-428-4025.
