A Cheyenne financial expert says the main reason personal budgets don't work is that people aren't realistic in planning them.

Ann Lucas is Vice President of First Education Federal Credit Union in Cheyenne. She says people need to be realistic about both their incomes and their expenses when planning a budget.

She says some common mistakes include leaving out expenses, making plans that include cutting back on spending but then not doing so, or not including realistic cost estimates of variable expenses like utility bills.

Lucas says it's especially easy to not include annual or semi-annual expenses like car insurance payments, holiday shopping or the cost of a vacation. She says another common mistake is calculating your income without factoring in taxes and the bite they take out of your paycheck.

Lucas says it's also important to have realistic budget goals. For example, a person could draw up a budget that aims to get the person put of debt by the end of the year. Since it's already July, that only leaves five months. If the debt the person is facing is substantial, it might not be possible to pay off a debt and still have enough money to live off of for the next few months.

Finally, Lucas says it's important to have some wiggle room. Such things as unexpected car repairs or medical expenses usually can't be predicted, but it's important to have some cash reserves available to meet those needs.

She says a recent national survey found 47 percent of Americans couldn't come up with $400 to deal with a surprise emergency--a situation she says is potentially disastrous if the emergency is immediate and can't be avoided.