{ Why Budgets Don't Always Work }

So, I've posted previously that to build a good budget, you have to be honest about everything. What's the point of building a house on half a foundation? It's the same with a budget. If you're not truthful, the numbers aren't supported, if they're not supported, the whole thing can collapse. For the last two months, I've been over budget, so was time for a re-assessement. The thing I wish more than anything to convey is that when you get to this point you can't see it as failure. It's merely a reevaluation.

What I realized is this: I created a budget based on old numbers (2006). Inflation and fuel have taken their toll. Self employement taxes and retirement savings are higher this year. Medical insurance went up. But there's another aspect to this picture that even I missed at first. Debt is debt and it was easy to roll the debt number into long term liability and sort of ignore it...kind of like the mortgage. It became a fixed number in the budget and I got so used to seeing it, I forgot to throw it in the middle of the room and look at it long and hard. After my reevaluation I got on the phone to start shopping interest rates and have concluded that I'm paying too much for my debt and all because I wasn't paying attention. After an hour on the phone, I've got three accounts consolidated into one at a lower rate and am saving 39%. It goes to show that the details matter and nothing should be sacred or assumed.