Friday, June 22, 2007

TOP THREE CAUSES OF BUDGET FAILURE

budget failureMany people make an honest attempt to budget, but become discouraged and give up before they are able to accomplish any significant financial gain. The top three causes of budget failure come into play before you even begin to set up your budget. Awareness of these budget busters, is your first line of defense in the Battle of the Budget.

Budget Failure #1 - Negative Attitude
It cannot be emphasized enough--a positive attitude about budgeting is essential to your success. If you think of budgeting in negative terms (such as a financial diet, financial handcuffs, restrictive, penny-pinching, a sacrifice, etc.), you are sure to fail, unless you are a martyr or a masochist who finds some strange reward in a punishing experience. For purposes of this article, we will assume that you are neither. A positive attitude means you think of a budget as a means to an end--a way to achieve your dreams and goals--and that postponing the instant gratification of spending all the money you earn is worth the rewards you will earn in the end.

Budget Failure
#2 - Lack of Motivation What is your motivation for budgeting? Are you trying to appease a nagging spouse? Following the terms of a debt repayment plan with a consumer credit counseling agency? Complying with an agreement made in bankruptcy court? These are not bad motivations, but they are external pressures and will probably not be easy to maintain over time. The best motivations are internally generated: do you honestly believe that budgeting can help you meet your goals? If you need a little help in the motivation department, see "Twelve Reasons Budgeting Can Improve Your Life". A quick re-read of these will surely inspire and ignite a motivational spark or two!

Budget Failure # 3 - Unrealistic Expectations What do you expect to gain from instituting and following a budget? Do you think that setting up a budget will reveal large caches of hidden cash or that the budget fairy will sprinkle fairy dust over your budget and magically transform your spending habits after a month or two of tracking expenses? The reality is that budgeting is an endurance event--those who stick with it, through thick and thin, will come out ahead financially. Do not expect miracles. What you WILL see if you stick with it is steady, measurable progress towards the goals that really matter to you.

Starting a budget without having a positive attitude, internal motivation, and realistic expectations, will probably set you up for failure. You can greatly increase your chances of success by ruling out the three biggest budget busters before you even begin.
Family budgeting – just the thought of it makes most of us cringe. However, mostly, we do attempt to curb our spending and live within our means. Others fall into bad habits, habitual spending patterns or impulse shopping and over-extend themselves, landing knee-deep in debt! Ironically, one of the first remedies for any debt consolidation or repair strategy, is to take a long hard look at the budget and financial patterns within the household! It is almost like running a diagnostic. To take a closer look, you are in effect placing your family dollars under a magnifying glass and microscope. This can prove both challenging and painful for most people. We hope to alleviate some of that initial discomfort and apprehension with this handy step-by-step guide and tips. Most financial advisors will tell you that you have to reward yourself for good fiscal responsibility, discipline and habits, to increase your motivation and success levels.

Budgeting is the first step, sticking with and to it, a close second and the sometimes overlooked but ever-important reward, has to keep the motivation going! To repeat and continue to experience the benefit of the budgeting cycle and discipline could be an uphill battle, but there are calmer seas ahead.


Cash management, savings, planning for retirement, setting financial goals etc. active and hands-on, is becoming increasingly important for the survival and well-being of our families everywhere.
Be your own best expert with coming up with new ideas on how to save money, budget better and spend less! Your unique strategies stem from a deep understanding of your own situation, demands, and needs. Discover which tips and ideas work best for you. After all, fiscal management and finances are definitely not a one-size-fits-all solution environment. It is personal, customized and unique.

Why You Should Start a Family Budget

12 Great Resons Why You Should Start Budgeting Now For Your Family And Yourself

THE RATIONALE AND PROCESS OF FAMILY BUDGETING


Here are twelve good reasons to get you started:
family budget

1. Family budgets are used as a baseline, analysis-tool and roadmap. It is a useful tool. It tells you whether you are headed in the direction you want to be headed in financially. It helps you to move from spending to saving and good fiscal balance, management and responsibility.
You may have goals and dreams, but if you do not set up guidelines for reaching them and you do not measure your progress, you may end up going so far in the wrong direction you can never make it back.

2. It is often described and justified as an empowering enabler. A budget lets you control your money instead of your money controlling you.


3. A family budget is a realistic estimate and true reflection of current circumstance and means, a type of financial situation-analysis that will tell you if you are living within your means. Before the widespread use of credit cards, you could tell if you were living within your means because you had money left over after paying all your bills.

There are lots of family budgeting tools available on line that make it a fun and enjoyable task and activity, to assess and analyze your family’s financial situation with minimum effort. There is also lots of free financial software and most of it sets up easily and provides you with a detailed family budget online. It manages your finances, hassle-free and almost effortless. Well, almost! It will require input and minimum effort through hands-on involvement in setting it up, populating, maintaining and editing it. Mvelopes.com is a good example of market offerings that are available at no cost to you, just waiting for the motivated family budgeter to embrace and try it out! Some websites offer free financial newsletters by e-mail, with lots of money saving tips, budget advice, and other relevant personal and family-related financial information. The availability, accessibility, virtual marketplace, ease of use and more of credit cards has made the need for family budgets much less obvious. Many people do not even realize they are living far beyond their means until they are knee deep in debt, struggling to make ends meet and sinking fast into murky financial waters. Budgeting for your family can be a life and money saver, a reality check, BUT ALSO a remedy!

4. A family budget can help you meet your savings goals. It includes a mechanism for setting aside money for savings and investments.


5. Following a realistic budget frees up spare cash so you can use your money on the things that really matter to you instead of frittering it away on things you do not even remember buying.


6. A family budget helps your entire family focus on common goals. It is unifying families in mutual purpose and effort, working together towards a successful outcome and reward.


7. A budget for your family helps you prepare for emergencies or large or unanticipated expenses that might otherwise knock you for a loop financially.


8. A personal budget can improve your marriage. A good budget is not just a spending plan; it is a communication tool. Done right, a budget can bring the two of you closer together as you identify and work towards common goals and reduce arguments about money.


9. A budget reveals areas where you are spending too much money, so you can refocus on your most important goals.


10. A budget can keep you out of debt or help you get out of debt.


11. A budget actually creates extra money for you to do use on things that matter to you.


12. A budget helps you sleep better at night because you do not lie awake worrying about how you are going to make ends meet.
Nevertheless, despite all these wonderful reasons quoted above, people are still hesitant to commit to family budgeting as standard practice in their households.

About Author For More Great Information, And useful Tips On Creating A Winning Family Budget Or Even Improving Your Existing Budget visit http://www.family-financial-success.com

6 Critical Benefits of Preparing Your Own Personal Budget

The role of a personal budget is to help you manage your personal finances and eventually become free of debt. This is the dream of us all, isn't it? Most people shy away from doing the personal budget thing, but it is the best, most trusted and proven method for getting your personal finances in order. You can have your own personal budget completed within a couple of hours.

personal budgetThe task of preparing your own personal budget is a liberating experience. You can finally see the true state of your own finances. The benefits listed below will help encourage you in making your decision to start today.

Benefit #1. The personal budget focuses your thinking.

Without a personal budget you are not able to clearly see the extent of your spending compared to your income. This is the most important role of your personal budget. It will show you whether you are living within your means or whether you are living on borrowed funds. It is also the tool that can show you where all your money is being spent. This allows you to answer important questions, such as "Am I wasting money on things I don't really need?", "Is my credit card debt to blame?" and "How much better off would I be if I could manage to be free of debt?".

Benefit #2. A personal budget helps you save money and set goals.

Once you have correctly prepared your personal budget, it will show you how much you need to save from your income to meet your expenses and set aside some funds for emergencies. It allows you to set goals, both for the amount and the timing. For example, you may set a goal of paying $2,000 off your credit cards, within 1 year. Once you make a commitment to yourself to make this work the budget becomes a tool that will help you stay on track.

Benefit #3. Keeps your goals in your mind.

It is easy to slip back into your old spending ways if you do not commit to making your personal budget work. The budget will help you keep the goals you set in your mind when you are tempted to give in. When you are out, it can help you say no to frivolous expenditure, say no to that daily coffee-shop coffee, think twice before you hand over your hard-earned money on things you don't really need and wait until that item you really want goes on sale.

Benefit #4. A budget helps you live within your means.

Every time you make a spending decision, it has a positive or negative impact on your personal financial position. The budget can show you clearly how your spending habits affect your finances in advance. Your personal budget can help you understand that if you spend money on this item you can't use the same money to spend on something else. You only have a finite income. If you spend more than you earn you are living on borrowed money and the cost of that money is interest. The interest on borrowed funds is most probably the cause of your financial worries.

Benefit #5. Puts you in control of your finances.

If you've prepared your personal budget correctly, you will see how much you have available to spend, after taking into account your debt repayments and savings requirements for your future needs. This information can take away the guilt you may have felt when purchasing some item(s) you knew you couldn't really afford. When you know you can afford an item you really want, the purchasing experience will be much more enjoyable and rewarding.

Benefit #6. - Tracks your progress toward your goals.

Once you prepare you budget it should not put into a drawer and forgotten. It should be a live document that you refer to weekly, or at least monthly. This is your guide to your own financial freedom. You need to check your progress towards your goals, thus giving you the incentive to keep going and achieve your financial objectives. If you make the effort and follow your plan, you'll be surprised how easy it really is to reach financial freedom.

About Author
Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget." It based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You can also click here for your FREE Mini-Budget.