| Budgeting is part of a complete financial program. | | | | months. Like proper goals, a budget should be |
| After all, a budget clearly defines how you will | | | | realistic. Indeed, a budget is merely a roadmap to |
| allocate your income stream. However, budgeting | | | | your financial objectives. If a budget represents |
| seems like a purely academic exercise to some | | | | what you want to do instead of what you plan to |
| persons. This attitude may cause and result in | | | | do, it will fail. |
| budget failure. Budget failure can occur in the | | | | 4) Not budgeting in the context of financial |
| process of budgeting or at its implementation. | | | | planning |
| There are several reasons why budgets do not | | | | If you do not budget in the context of a |
| work for everyone. | | | | complete financial program, you will be highly |
| 1) Lack of adherence | | | | susceptible to unexpected occurrences and |
| Planning is one aspect, but if you do not actually | | | | financial disasters. You may even be disciplined |
| implement the plan, then it would fail. Indiscipline is | | | | with your budget, but all with be in disarray if |
| a major reason for budget failure. Not sticking to | | | | major medical expenses or heavy financial loss |
| your plan could suggest that it wasn't a good one | | | | occur. Budgeting merely reinforces the aspects of |
| in the first place. However, a likely reason is that | | | | good financial planning. If the financial wall that |
| the budget was not adhered to. Bad financial | | | | budgeting reinforces is not stable, the wall and the |
| habits (like impulse buying) and a poor attitude | | | | budget will come crashing down. |
| towards finance could be responsible for financial | | | | 5) Not automating savings and payments |
| indiscipline. | | | | To err is human and we all have shortcomings. |
| 2) Failure to link your budget with your financial | | | | Budgeting is an ongoing process, so there are |
| goals | | | | times when we may lapse or forget things. |
| Budgeting should not occur "just because". It must | | | | Automating your budget is one way to avoid |
| be a systematic approach to achieving your | | | | falling prey to the lapses that can happen to the |
| financial objectives. Linking your budget to financial | | | | best of us. Those who do not automate their |
| goals would further motivate you to stick to the | | | | budget would have a harder time preventing |
| budget. Failure to do this would leave the | | | | budget failure. |
| budgeting process as an arbitrary plan that has no | | | | A successful budget is one that is based on |
| root in your financial reality. | | | | financial goals and one that you can stick to. Given |
| 3) Unrealistic budgeting | | | | the uncertainty of life and the prevailing attitudes |
| Some people confuse goals with dreams. Those | | | | towards finances, it is easy to understand why |
| same people would use their budget as a wish list. | | | | budgets fail. Still, knowing how easy it is for |
| They wish they could save $1000.00 per month | | | | budget failure to occur can properly insulate you |
| or that they could eliminate their debt in six | | | | against budget failure. |