I have seen a lot of people prepare a written spending plan, and then fail to follow that plan. At first blush, one would want to say that the people just did not have the discipline to stick with the plan. As an engineer, I am always seeking to understand the root cause of someone's failure to stick to their budget. So here are some of the top reasons that I see budgets fail.
- Not having a budget. That was too easy, but it is true! Fail to plan. Plan to fail.
- Extremes – no spending money, $3.21 for groceries for the month, and no fun in the plan
- Spouse refusing to participate in developing the spending plan
- Spouse not asked to participate in developing the spending plan
- No saving in the plan – this allows emergencies to totally derail the plan
- Known upcoming expenses are not funded so they become budget busters when they do happen – Seriously. Christmas IS going to happen!
- Can not say "NO!" to children
- No giving. This is something I clearly see in financial counseling appointments. Those who give are much better off – and it is not income related.
Maybe you can add some to this conversation in the comment section. Better yet, maybe you can share how you have overcome these issues.