Common Budgeting Challenges to Overcome

The word “budget” has been known to make people cringe, cry and bury their heads in the sand, but budgeting challenges don’t have to keep you from getting the job done. Budgets are just a set of guidelines to help you manage your money. (Budgeting Basics will help you get started.) Once you set up your system, budgeting isn’t even that much work. If yours isn’t working for you, then scrap it and start again. But don’t be stopped before you start by challenges that you can easily overcome.

Budgeting Challenges

1. The All-or-Nothing Mentality

Many people are turned off by budgeting because most advice about creating one requires tracking every penny spent for three months. That is a lot of saving receipts and tracking, especially if you aren’t using an automatic system. The point of a budget is to get a picture of your expenses and plan for your financial goals – in other words, it is a tool for you and you alone – and if tracking every penny is a roadblock to get you started, cut yourself some slack. Perfect is definitely the enemy of good.

Having a general idea of your income and major expenses is a good first step toward creating a budget. Common spending categories include:

  • Rent
  • Utilities
  • Phone/Internet
  • Transportation
  • Insurance
  • Groceries
  • Car Payments
  • Childcare
  • Loans or Debts
  • Clothing
  • Entertainment
  • Dining Out
  • Travel
  • Charity
  • Savings

If you tally up roughly what you spend for each of these categories (or what you would like to spend) – and it is less than your income – then it is fine to track your large expense categories and leave out the occasional lunch or impulse purchase. If you find that you’re overspending, you need to reassess and set a stricter budget.

2. Labor-Intensive Tracking

As mentioned above, common budgeting advice requires you to track all of your receipts and spending for multiple months. You can do this on paper or on a spreadsheet, but there are easier ways. A variety of apps and computer programs exist that will track your spending, categorize it, help you create a budget and note progress toward your financial goals.