When you need to do as much as possible with a limited amount of money, you need a budget. But while budgeting can help you save more and achieve your financial goals, it’s also challenging. It requires discipline and focus, but you also need to be flexible and creative in order to deal with what life throws your way without losing sight of your goals. And you won’t get very far if you don’t get those nearest and dearest — or at least those you share money with — on board. Here are five of the biggest budgeting challenges you might face, and how to address them.
1) Getting Your Spouse and Family on Board
If you’re single, you might not have to worry so much about getting your family on board with a budget. If you’re married or in a committed relationship where you share finances, you need to get your partner on board.
If you and your partner disagree about how and where to spend your shared money, the only thing you can do is keep talking it out until you reach an agreement. This may be a process, depending on how divergent your beliefs and attitudes about money are. If your views are very different, you may need to revisit the topic multiple times and make compromises together. You should both discuss what you want for the future and set your goals accordingly, then hold each other accountable for doing what’s necessary to achieve them.
2) Dealing with Unexpected Expenses
Many “unexpected” expenses aren’t unexpected, but simply aren’t planned for — things like birthday presents, yearly personal property taxes, quarterly income taxes, home maintenance costs, and seasonal costs like landscaping and Christmas gifts.
Plan for these kinds of expenses by figuring out how much they cost you each year, dividing that number by 12, and putting that amount aside in a sinking fund each month so it’s there when you need it. Adjust the math as necessary to account for irregular expenses that are coming up sooner — if, for example, your personal property taxes are due in six months, divide your tax liability by six instead and save that amount each month to prepare.
For those expenses that you truly can’t see coming, you need an emergency fund. Ideally, you should sock away three to six months’ of living expenses for an emergency, but if you have nothing, start with a goal of $1,000 and work your way up.
3) Giving Yourself Room to Have Fun
A budget so strict that you’re not allowed any fun money is like a bad diet — you’re setting yourself up for failure. While saving is commendable and can help you reach your financial goals, you also deserve to enjoy your life. Leave some room in your budget to buy the things you enjoy. How much is up to you — if you’re trying to pay off high-interest debt or you’re saving for a down payment, you may want to cut your spending budget in favor of paying off more debt or saving more. If you’re in a strong financial position and on track to meet your goals, you may decide you can afford to cut loose more. One popular budgeting method, the 50/30/20 rule, advocates using 50 percent of your income for expenses, 20 percent for savings and debt repayment, and the remaining 30 percent for nonessential spending.
4) Feeling Overwhelmed by the Labor of Tracking Every Penny
Lots of people think budgeting means tracking every penny you spend — and it can, but most don’t have the stamina or the attention to detail needed for the rigorous accounting involved in tracking every debit and credit and balancing your budget manually each month.
Fortunately, you don’t need to track your money that closely in order to manage it efficiently. Figure up what your essential expenses are each month — including things like rent and bills, but also food, gas, medications, clothes, and personal care products — and subtract that amount from your monthly income. Next, figure out how much you’re saving and putting towards debt and subtract that amount from your monthly income. The rest is your spending limit. Track your spending easily using budgeting software, or do all your spending on the same card, and ease off when you start to get close to the limit.
5) Not Being Able to Make Ends Meet
A lack of adequate funds to cover your expenses is one of the most common budgeting problems there is, and there are two basic approaches to resolving it: either cut back on expenses, or find a way to earn more money. There are tons of ways to reduce your expenses, but if you’re already using a budgeting app or software, you should be able to sort your spending by category so you can easily see where to cut back.
If your expenses are already as minimal as you can make them and you’re still coming up short, you need to earn more. While that’s easier said than done, you can walk dogs, pet sit, drive for Lyft or Uber, deliver food or do other gig economy work until you find a second job — or a better first job — to ease the financial stress.
Budgeting is never easy, but its challenges can be overcome. With a little advanced planning and some flexibility, you can leap over obstacles to reach your financial goals faster than you thought possible.