Avoid Budget Burnout


It is the beginning of the month, and you are ready to prepare a brand new budget for the upcoming month. You know your expected income so you divide it up into categories and put aside a large amount for savings, and another amount to pay your loans. You then feel relieved, and hope that this is the month where everything will come together financially. But then reality hits and the dream turns into a nightmare. By the middle of the month, you have already spent too much on eating out; your washing machine breaks down and you have to fix it. And to make things worse, you make several short trips to Miri as well as buying expensive birthday gifts for your partner. By the end of the month you feel depressed and frustrated. But it does not have to be like this. If you have been failing to make your budget work, we have identified a few basic ways to help you start achieving fiscal balance.

1/ Avoid having unrealistic expectations

While it may look good on paper, can you realistically expect to go from spending $200 a month on eating out to $0 with the click of a mouse? Take small steps to adjust your budget. Lifestyle adjustments are easier without abrupt changes.

2/ Make sure you are able to keep up with tracking

You may need to rethink your budgeting strategy if you make so many purchases each day that you lose track of the receipts; and you have no idea of what the charges are on your credit card. Waiting until transactions clear the bank to track your budget may also be disastrous (for example, transactions from Friday may not even appear until the middle of the following week!). Be sure to keep on top of your spending to ensure that you have an accurate idea of your financial situation.

3/ Plan for irregular expenses

Not all expenses occur monthly. Many, like certain types of insurance, car registration, medical expenses, and others occur at different times throughout the year. It is important to average out these expenses and account for them when creating a realistic and workable budget.

4/ Be ready for unplanned expenses

Like irregular expenses, unplanned expenses occur throughout the year, but are even more unpredictable. They occur when least expected, for example you may suddenly have major plumbing repairs at home. By properly averaging out your yearly expenses and having a good emergency fund, you should be able to comfortably deal with this type of expense.

5/ Use the right tools

When your needs or habits do not connect well with your budgeting software, nothing you can do will give you the results you want. The best way to find out what best works for you is to try different services and analyse what features are most important.

6/ Make sure that you are using the type of budget that suits you

A wide-scope budget that tracks six major categories may not be the right type of budget for a detail-oriented person who wants to keep track of every cent. On the other hand, a budget with sixteen categories will only frustrate someone who just wants to see the big picture.

7/ Do not get ahead of yourself

By the middle of the month if you have a budget surplus do not get ahead of yourself and commit your income through the end of the month, without knowing what is ahead of you. Use the surplus as an extra cushion in case of unexpected expenses, and save it if things go well.

8/ Try not to be too detached or too detailed

You should definitely monitor your finances closely on a regular basis to make sure that things are on target. However, checking your account every 30 minutes to make sure nothing new has been posted will quickly give you a budget burn-out.

9/ Leave enough extra room

Even if you include irregular and unplanned expenses, remember that even the smallest additional expense over will immediately put your budget in the red, and this will leave you feeling dejected. So to avoid this leave a percentage of your income un-allocated until the end of the month.

10/ Forget failure just get back on track fast

It is easy to get off track when your budget does not work. Even if you go off track, rather than beating yourself up for making mistakes, look at why the budget is failing and make necessary corrections as soon as possible.

AIA understands how important it is to plan ahead for important occasions such as saving for your children’s education, starting a business or enjoying well-earned golden years in retirement. It is well known that the earlier financial planning is started, the better possibility there is of getting higher returns over time. AIA has various saving plans for achieving financial goals and securing the lifestyle that you desire. So start planning early and reap the rewards!

This article was published in the March 2016 issue of Inspire Living Magazine. Download it here!

This advice on family living is made possible with support from