by Olha Romaniuk

Created on: March 26, 2009

These days everyone is talking about cutting back on impulsive purchases, finding cheap bargains and, most importantly, sticking to the budget. It is becoming increasingly important to not overspend in the economic times where job security is fragile, and even the securest of employments can become a little shakier. A budget is a way to keep in line and withhold from spending too much, in order to plan for a secure future. Sticking to a budget is a whole different ball game, as many people tend to abandon their monetary restrictions over time and allow themselves to indulge in uncontrolled spending.

So why do budgets fail? We can make judgements about the people who don't stick to their budgets and we can say that they don't have the will power to adhere to the originally set goals, but the truth is - every one of us can fall into the trap of not being able to follow the path to the set expectations. Though it may depend a lot on a person, as to why he or she may not be able to stick to the original budget, a lot of budgets also fail due to the unrealistic expectations and not understanding what a budget really is.

How can someone not understand the implications of having a budget? Too many people think that having a budget is like having a rope tied around their hands, preventing them from spending money on what they really want to purchase. That is the wrong way of looking at the art of budgeting, as the stress of always not buying what one wants will sooner or later lead to that person breaking and giving into buying an indulgence for themselves. It is more useful to look at a budget as a tool that can provide information to manage one's finances. That is, by tracking one's income and expenditures, a budget can ultimately help get the most of the money that is left over.

Personal expenses should always equal to a lesser amount than one's monthly salary. That is, if a person spends more money than he or she earns, that means that there is no income coming in and the debt is growing, instead of decreasing. A budget should take into an account those basic expenses that are integral to comfortable living. For example, essential expenses include rent or mortgage payments, food expenditures, car payments, health insurance, etc. Non-essential expenses are the additions to those that are vital to comfortable living - those could be dining expenses, gym memberships, vacations, clothing purchases.

As mentioned above, a budget can fail exactly due to the fact that some

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