Lawyers generally make a very good income, but like successful people in all professions, it’s not unusual to have a budget that works on paper yet fails in practice. Time and again one of the first things I’m asked is; what am I doing wrong?
Here are five factors that contribute to budget frustration.
- Unrealistic or Missing Numbers
Many of us underestimate how much we actually spend on everything from groceries and gifts to dining out. We also tend to forget to include expenses like annual credit card fees, kids’ activities, association memberships, networking expenses and charitable donations.
- Short Term Outlook
If you try to budget only for the month ahead you’ll find yourself running into expenses you aren’t prepared to handle. You need to be planning for vacations, home renovations and other big ticket items all year long.
- No Plan to Support the Numbers
If you’ve decided that you are spending too much at the gas pump each month, have you arranged to carpool or bus to work? If you are trying to lower your water bill is the whole family on board with shorter showers?
- No Motivation
It’s important to have a goal that gets you excited, whether it’s a trip to get away and unwind, or realizing the dream of a family cottage. It’s a big “why” that gives you a reason to stay focused on your financial plan.
- Life Happens
Budgets often flounder because life won’t conform to a spreadsheet. The dishwasher shuts down or the garage door won’t go up. Life is messy and things happen.
So what’s the answer? It’s a mind shift from a static budget to a flexible guilt free spending plan. Enjoy the pleasures of life while staying on track with your financial goals.