Most of us, at one point or other, start a budget. Some of us are natural budgeters. It just makes sense on some level to these people. But, there are often many surprises you find when you make a personal budget.
Carefully managing every dollar is wise. So, why wouldn’t you do it? Well, for other people this isn’t so easy. Just because budgeting is sensible doesn’t mean they do it regularly or rigorously.
Along with working out three times a week, eating many helpings of vegetables a day, and performing preventative maintenance on the water heater, just because something is smart to do doesn’t mean we always get it done.
The thing is, once you carefully make a personal budget and follow a budget for at least one month, you start to learn some surprising things about yourself and your spending habits. The image you have of your finances in your head likely does not correlate to reality in any realistic way. In some cases, we learn that things are better than we thought (hooray!), but in most cases, we learn that our money is being wasted more than we wanted to think.
This is one of the main reasons people don’t budget in the first place. There is a sense of dread that, once personal finances are examined, so many problems will reveal themselves that it will take too long to fix them, with too much tough work expended along the way.
It’s the same impulse that keeps us away from the dentist office, even though we haven’t been in a couple of years or more. We know that going will repair the damage, but the process is so uncomfortable that we put it off, sometimes indefinitely.
However, you manage to screw up the courage to perform your first budget, make it happen. Take a careful look at every dollar you spend for a month, and track exactly where it goes relative to your budgeting goals. Many people discover things that surprise them. Here are just a couple of examples.
Surprises You Discover When You Make a Personal Budget
- PPI Insurance or Other Scams. Lots of people find that they have financial parasites preying upon their bank accounts. PPI is one that’s common in the UK – payment protection insurance that was fraudulently sold to unwitting consumers. Making a PPI claim is easy, and can often undo years of payments that have been stolen from you. But you’ve got to find the problem before you can fix it.
- Out of Control Spending on Something You Love. You already know what the likely offender is. Maybe it’s going out to bars and restaurants. Maybe it’s entertainment – movies, concerts, festivals, web entertainment. It’s not uncommon for people to be shocked when they learn that their monthly spending on food is double what they spend on rent. Don’t beat yourself up, just look carefully at this spending and make changes as you see fit.
Making a budget is about taking control of your life. It may reveal some tough surprises, but it’s worth the examination. In a year, when your finances are more orderly than they’ve ever been before, you’ll be glad you made the changes.