MoneyMoments | MidFirst Bank

Avoiding Budget Failure

Why Budgets Fail

Trying to keep a budget and trying to stick to a diet have several things in common:

  1. Both require some form of restraint and delayed gratification
  2. Both cause you to make intentional choices about what you consume
  3. Both are notoriously difficult to maintain

Anyone who has tried to do either of the two can attest that both are challenging and they have probably failed at some point. Why is that the case?

Delayed Gratification

In the information age where we can access almost anything we can imagine within seconds, it can be difficult to wait for results. People go on diets for two weeks and expect to lose ten pounds because they want results immediately. Similarly, someone might create a budget so they can save for a dream vacation but after two weeks of reduced spending, they lose sight of their goal. They settle for the immediate gratification of a new pair of shoes or another new gadget rather than waiting for the bigger payoff of the vacation.

Difficult Choices

One of the biggest side effects of counting calories and tracking spending is that you become more aware of what things cost relative to one another. For example, that large white chocolate mocha may “cost” the same calorically as a burrito bowl. In the same way, thinking of a vacation as 30 meals eating out, or considering a new pair of shoes as three weeks’ worth of lattes can give you some spending perspective. Is this meal out with friends worth 1/30 of your vacation? It could be, and it’s up to you to decide! Making these kinds of choices can be especially difficult when you start budgeting for the first time and feel the impact they have on your normal routine. Making or breaking a habit takes time, but with each decision, the process becomes easier and puts you one step closer to your goal.

Being too Extreme

Nearly everyone has a personal experience or knows someone who has tried an extreme diet that lasts for a few days or weeks but fizzles out as the fatigue of such an extreme dietary change sets in. People often make the same mistake with budgeting. They might boldly proclaim, “No eating out this entire month!” or “I am not buying a single thing online this month!” While these extreme measures might seem gallant, they generally do not last very long before the individual gives up and abandons their budget. Instead of trying to make such extreme changes immediately, focus on sustainability. If you find yourself spending more than you would like dining out, rather than cutting it out completely, set a goal to work towards reducing your dining out expenditures by a certain dollar amount each month. You’re much more likely to stick with it if you allow yourself to gradually become accustomed to the change.

Learn more budgeting basics by watching this video.

Budgeting goals must be tailored to you. Money decisions made by one person may not work for another individual. The key is creating a budget that works for you and is sustainable for the long term.

For more budgeting tips, visit moneymoments.com/money-management.

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