Why People Don’t Budget And Why You Should

If you spend the time daydreaming about having more money because your paycheck is not enough, probably “lack of money” is not your only issue. Budgeting is the first and most common advice when you are struggling with money. Everyone knows about it, but only a few of us create and follow our budgets. But, why? Why are we so afraid to commit and follow a tool that is going to save us from huge headaches?

Well, we have done our research and we have the most common causes for your lack of budgeting, within a couple of tips and tricks to overcome your budgeting anxiety.

Budgeting Anxiety

Money and finances have always been a tricky subject to talk about. We are not fans of restrictions and we don’t want to stop spending on things that make us feel good, like a new pair of shoes or dining out. Furthermore, we are afraid to open Pandora’s box and see a horrifying financial situation that we might not be able to handle appropriately. However, you already have a budget, but you are not controlling it. You already know when your rent is coming, or when your credit card or phone bills are due; we only need to have a clearer view of where your money goes. 

Once you get through it, taking the next step will be easier. Yes, the initial budget can be scary and even a little bit shocking, because it’s the first time being conscious about our expenses, but YOU have the control. You can change and re-allocate your money in the right places. If you are over spending, a budget will help you to gain control again and it will help you to create better spending habits. However, if you have a hobby or an activity that makes you happy, you don’t need to sacrifice it for the sake of your budget, just make sure to have your necessities covered and cut the necessary expenses.

Related Links: Can an Overdraft Affect Your Credit Score? + 3 Surprising Things That Might!

I don’t have enough money 

The first and most common excuse is the “lack of money”. If that ‘s your case and you are constantly struggling at the end of the month, a budget is exactly what you need. Budgeting is going to help you to make the best and most accurate decisions of where to allocate your money. If you are dealing with credit card debts or student loans, a budget will make it easier to track your spending habits so you can reach your financial freedom sooner than later. 

You will learn to reduce your expenses in places that are not worthy and invest in what really is important for you (paying off your debts, a good savings account, traveling). Furthermore, you feel liberated and at peace knowing that your money is allocated in the right place, and ALL of your essential needs are met. Say goodbye to the stress of paying your credit card or having enough money to cover your rent. 

Related Links: Most Common Debts Among Canadians

I don’t know how to create a budget 

If what is stopping you from creating a budget is the execution, we have some tips for you. First, you can start creating a list of your regular expenses, like rent, debts, paying your phone bill, and paying for food. Over time, you can reduce your expenses and increase your revenue or savings, but we need to start with the expenses. As we talked above, once you get over your budgeting anxiety, calculating and allocating your resources will be easier. 

Now, if you are struggling to find the right tool for your budget, Excel sheets and regular paper are not the only resources you have to create a concise and accurate budget. 

We encourage you to try different methods for budgeting; from downloading a few budgeting apps and checking which features work with your lifestyle. If you need physical evidence or guidance, we suggest looking for budgeting worksheets and print the ones that are more appealing to you. 

Remember, creating a budgeting is not enough, you need to actually implement it if you want to see results. Moreover, embrace change and don’t be afraid to make the necessary adjustments to make your budget work. 

Related Links: Create a Realistic Budget During Covid-19

My partner isn’t supportive about budgeting 

If you are committed to a relationship, one of the most important subjects to talk about is money. Even if it is difficult, talking about the relationship you both have with finances will make your accounts easier to manage. However, if you are considering budgeting and your partner is not on board with the idea due misconceptions about money, we have some solutions for you.

First, you need to talk with your partner about their doubts and fears related to budgeting. Most of the time, the relationship they hold with finances is complicated and talking about money only brings anxiety to them. Also, if your partner is in debt, seeing the actual numbers can be extremely scary for them. However, you can explain to them that budgeting is essential if you two want to reach financial freedom and tackle debts. Talk about the goals you want to achieve through money and savings, and explain why a budget is going to make the process easier. 

After you have agreed that a budget is not a bad idea, you need to choose the best way to implement it. You can combine your incomes and then prioritize the essential expenses (rent, loans, food), or you can determine how much is paying each of you based on your respective incomes. The final decision is up to each couple, but we encourage a realistic perspective in your little and spending habits. Even if both of you have a great income, living up to your means is going to lead both of you to debts. 

However, if your partner is not willing to contribute with budgeting, you can always do it by yourself. First, you need to check what you contribute to your household on a monthly basis, and then you can create a personal budget based on your household expenses. You will gain more control and confidence over your finances, and you might inspire your partner to go on board with a shared budget after seeing your hard work paying off.

Related Links: Money & Love: Why You Need To Talk About Money With Your Partner BEFORE Marriage

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