Written by Nick Bregozzo, a debt management specialist at Debt Fix

Many 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 failures 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 counselling agency? Complying a court order ? 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 failures 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. 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 our financial survival.

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, financial management is definitely not a one-size-fits-all solution environment. It is personal, customized and unique.

In the following section, we will briefly refer back to the family budget defined and look at some of its elements and criteria, purpose and functions.

    • What is a family budget?
    • What constitutes a good family budget?
    • What should it contain and look like?

What is the family budget again? It is a pro-active, hands-on approach, focused, technical and disciplined strategy to getting a handle on the current financial situation in the home and family.

It concerns setting realistic, SMART financial goals for the household, sticking to it, celebrating successes, learning from failures and trying again if you do not succeed or get it right the first time round. It is about shifting focus completely from a mainly spending to a savings orientation.

We have laid out what a family budget is, does and affects. A brief mention of what constitutes a good family budget and the elements that it contains as well as its appearance, format and functional role follows.

All of us have a wish list of new things that we want. There are always things we would find and places to spend our money. Take the time to make a list of these things. Let everyone who shares cost in your home to have input into making and finalizing this list. Write down what you want most. Beside the goal, write how much it will cost. Split it into goals with ongoing costs and the cost per month, and goals with a one-time cost and list the actual total cost (including all hidden fees, taxes, shipping and or other charges that might apply. Now, next to these columns, start to prioritize these goals.

Which goal comes first? You need to decide which goal on your list should come first. Talk this over with the other members of your family. If you live alone, think it over yourself. Try to list your top four goals and decide what you can fit into your budget.

A "good" budget is in the eyes of the creator or beholder alike! Some suggested, but by no means comprehensive criteria follows:

    • Budget is both process and product
    • Collaborative, engaged, hands-on effort
    • Characterized by communication and mutual agreement
    • It advocates involvement and exchange
    • It is real-time and reality-based
    • Factual
    • Accurate
    • A financial check-up and check-in on the family finances, household dollars, situations, behaviours, and resources.
    • An action-plan, future-oriented
    • Offers a peak into the past, scrutinizes and enlightens the present, while planning and promising a future
    • Goal and results oriented

Still struggling with Debt and want to talk more about it with our experts? For Free Debt Advice, call us today on 1300 332 834.