First Person: 3 Reasons Our Budget Has Failed

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I run my family's finances using a very structured budget that I've spent countless hours perfecting. Our budget covers everything from our monthly bills to money for movie nights, and most of the time it works flawlessly. However, there have been times when it has crumbled, and it's almost always due to human error. These are three reasons our budget has failed in the past.

Impulse buying

I've always had a problem with impulse buying, and I find it's one of the hardest buying habits for me to suppress. Even when I think I've got it under control something happens and I fall back into the trap. Not long ago, I decided to upgrade my desktop computer, and bought one for $500 without thinking about the consequences to our budget. While it wasn't a complete financial disaster, I did have to make several changes and eliminate some things to cover the missing money.

Forgetting to account for and yearly expenses

Most families have a number of expenses that only have to be paid once a year. For us, those are things like vehicle taxes, vehicle insurance payments, and veterinarian visits for our dog. Several years ago when the economic crisis was at its peak we were really tight on funds, but I did my best to keep us on a working budget; however, with all the stress and changes to the budget I forgot to about some of our yearly expenses. It wasn't until the reminders came in the mail for those bills that I remembered to pay them, and it nearly crippled us financially. In the end, we used what little money we had reserved and pulled through the mess.

Not budgeting for everything

When I'm working on our budget I tried to cover everything we could possibly need, but I didn't always do it that way. In the beginning, I only budgeted for our bills, so we were winging everything else. We went months without putting anything into savings, and we often overspent on luxury purchases and entertainment. I quickly learned I had to allot money for those types of things or our budget wouldn't work.

Having a fully detailed budget takes a lot of time and effort, and I've learned the hard way that it is worth it. I've also learned to expect things to go wrong because even the best budget can't stop all financial problems. Each one of my budget blunders has taught me a valuable lesson and changed the way I do things today.

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