10 Reasons Why Budgets Fail Reason #8

8. The Incomplete list

 

There is nothing worse than thinking you have everything under control only to find out that you did not budget for something that has now popped up as a significant expense.

During the time I went into people’s homes at night to do budget’s, I built up a large list of items that might need to go in a budget. I would work my way down the list and for the items that applied to my client I would enter the amount of money needed when the expense occurred, when it was due to happen next, and how often it would repeat.

That list made it so easy to make sure nothing got missed and the budget would not fall in a heap because money was needed that was not planned for. One day I remember missing ‘Petrol’ in one lady’s budget and it did caused some grief when we realised it and had to go back and fit it in.

It is important to make sure you have thought of everything or you have isolated all of the essential necessities so that even if everything else goes to ‘muck’, you still have your basics covered.

If you would like to download my list click here. It may not have everything you need to think of but gee it must go close!

The other thing you should do is spend a few minutes just looking around your home at everything you own and ask yourself what the plan is for each item. If there is no plan and you rely on the item then that is a clue that one day it is going to cause you grief.

In fact, before you purchase anything new it is probably a good idea to consider what the ongoing cost of ownership will be. Some things might be reasonably cheap to purchase but expensive to run or maintain. Ask about this when you are still contemplating making a purchase and definitely before you make it!

My wake up call for things around the house that will need replacing came the day my refrigerator died and I needed a thousand dollars.

Over ten years that would have cost me $2 a week. Over 5 years it would have been $4 a week. Over one year it would have been $20 a week. Unfortunately it cost me $1,000 that week and I had to pay off the money because I had not planned for the inevitable.

I realised that the sooner I started saving for all that stuff the less it would cost me each week.
If you know you have your list sorted out give yourself a big tick for number 8!

All 10 reasons have been taken from one topic in my Simple Wealth Steps program which is a 12 month course that takes you on an educational journey over time. It will get you thinking and learning about all the key financial topics and doing weekly tasks that reinforce the lesson for that week.

The ultimate goal is to help you develop habits that will carry your forward with a much more positive financial future. You will come out of the course with a much clearer idea of what you want to focus on as your wealth vehicle for the future and along the way you will have paid off debts and saved money you never thought was possible.

Visit Simple Wealth Steps and sign up today. There is no contract to lock you in if you are not happy with the course so there is no risk, just possibilities!

That’s all for today.

David Wright