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Many of us have a love/hate relationship with budgeting. We love the idea of paying down debt and saving more, but we hate the thought of tracking our spending and being restricted. Budgeting is right up there with dieting and exercise. We go into it with the best of intentions, but our efforts often fall short. Here are 3 big reasons why most of us can’t stick to a budget and what you can do to finally get your finances in shape.

Reason 1: You don’t know how much money you actually spend.

One of the biggest reasons you may have trouble with budgeting is that your budget doesn’t reflect your true lifestyle. It’s important to find out where the real money leaks are coming from in your budget. It’s easy to underestimate how much you’re actually spending.

Track your spending

Take advantage of online tools such as BudgetTracker.com to figure out exactly where your money has been going each month. Start by looking at your last few months of spending to get an accurate idea. Once you know where your money is going, you can make changes.

While cutting back on your “fun” spending like eating out is important, make sure to take a hard look at your fixed expenses as well. Your fixed expenses are the monthly bills you pay such as your cell phone, insurance, and car payment. My husband and I cut nearly $175 a month from our budget by reducing our fixed expenses. We got new quotes for auto insurance from several different companies. We got rid of cable and signed up for Hulu. We also called our cell phone company to ask about any new promotions and signed up for a cheaper plan.

Reason 2: You take an “all-or-nothing” approach to your budget.

Just like crash diets often fail, crash budgeting usually follows the same pattern. You overdo it, and then you quickly get burned out. Perhaps you’ve been going along freely spending your money when something clicks, and you realize you have to make a change. The problem is that trying to make a drastic lifestyle change too quickly usually doesn’t work.

Research shows that breaking a bad habit is hard. In fact, it’s much harder than we realize and usually takes a considerable amount of time. A psychological study done at the University College of London showed that it takes an average of 66 days to form a new habit (http://www.spring.org.uk/2009/09/how-long-to-form-a-habit.php). That means if your usual routine involves eating lunch out 5 days a week then it could take 2 or more months to get in the habit of packing your lunch.

Start by making small changes to your spending first

Don’t expect to transform your budget overnight. It’s going to take awhile to change your spending habits. Start with the small items first. What would be the easiest thing to give up? Could you make coffee at home a few days a week and skip Starbucks? Could you commit to packing your lunch one day a week? Could you spend a couple hours on the weekend making meals for the next week?

Reason 3: You don’t automate your savings 

Keeping all your money in one account makes it difficult to know how much you have for spending, saving, and paying bills. I’m a big proponent of using different bank accounts for different spending purposes. For example, my husband and I have 4 different accounts: a savings account for emergencies, a second savings account for fun expenses like traveling, a checking account we use to only pay bills, and a checking account we use just for spending. We then set up automatic transfers between our accounts. We get a weekly allowance to our checking account for spending. We automatically send money to our savings account every payday, and we keep only the money we need to pay bills in our other checking account.

Separate your money into different bank accounts and automate your savings 

Once you know how much your lifestyle costs, you can open different checking and savings accounts based on your goals. Make it easy on yourself to save by automatically transferring money to your savings account. Set up a checking account that you only use for spending and not for paying bills. That way when you check the balance you will know that it is money you truly have to spend because your other account has money to pay your fixed expenses.

Sticking to a budget isn’t always easy, but getting your financial life in order is worth the effort. Don’t get discouraged if you have a bad day or even a week and fall into old spending habits. Forgive yourself, and try again the next day. As the saying goes: “Anything in life worth having is worth working for” – Andrew Carnegie.