Many people suffer from budgeting problems in their lifetimes – it’s not an uncommon ailment, but it can have consequences that permeate beyond simple inconveniences and can snowball into much larger problems.
If you find yourself living from paycheck to paycheck and struggling to cover basic expenses, this might be an indicator that you’re suffering from a budgeting problem. You may also have other issues such as high credit card balances, a lack of emergency savings, and an inclination for overspending or impulse buying.
Budgeting problems often result in circular or self-perpetuating patterns of behaviour – for example, having a lack of funds might encourage you to take out high-interest loans that are hard to pay back. The subsequent increase in debt might encourage one to take out another loan, and the pattern continues. Ignoring these patterns of behaviour is bad for your financial health, but could also result in a poor lifestyle replete with stressors and discomfort.
There are a variety of solutions to having budgeting problems; one of the best ways to start is to create a detailed budget for yourself. Ideally, write it up so you can have a physical copy to look at – not only is this practical, but it can also solidify the commitments in your mind once it’s committed to paper. Have a look at any unnecessary expenses you might have – dining out, subscriptions, impulse purchases, and random recreational activities are all generally considered to be non-essential. You can cross-reference your activities with your budget, and perhaps have a look at your spending history to make yourself aware of your habits.
Another important goal to have if you’re suffering from a budgeting problem is to develop an emergency fund. This should be a priority – it will bring you financial stability and is also a great starting point when allocating your expenses, as it assists you in prioritising your spending and quantifying your habits. You may want to establish other financial goals that are particular to your circumstances – for example, you could try to pay off some debts, save for a holiday, or plan for retirement. Just like saving for an emergency fund, this helps prioritise and quantify your incomes and outcomes and can bring perspective to your priorities. If you’re consistently struggling to grapple with these financial ambitions, I’d also consider seeking some form of professional help from a financial advisor or credit counsellor.
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