8 Reasons Why Your Budget Doesn’t Work
Over the years, I have tried many different approaches to budgeting. Most of them did not work. When I ask a potential client if they live on a monthly budget, most say, “Yes,” followed by a few sentences that essentially equate to, “ No.”
There are many reasons why some approaches to budgeting don’t work, leading us to give up or avoid the process altogether. Today, I will explore a few of these reasons and will provide some tips to counter them. If you’ve attempted to live on a budget only to declare they don’t work, read on!
8 Reasons Why Your Budget Doesn’t Work
1. We believe budgets are restrictive.
We avoid budgeting altogether for this reason. In reality, a budget can be extremely freeing because it gives you a sense of control. Think of your budget as your plan, your map for your money. The focus is not on what you can’t do with your money but rather on what you can and will do with it.
2. We think we don’t have enough money to budget.
This may sound counterintuitive, but I hear this one a lot. If you have any money or expenses at all, then you need to live on a budget. And if you sense you have more going out than what’s coming in, then a budget is that much more crucial. When you plan how to spend your money, it will stretch further because you will be spending with a purpose.
If you want your budget to work, then start counting down…
3. We attempt a one-size-fits-all approach.
We draft a budget once and expect the same budget to work every month. November brings different expenses than March does, so your budget needs to reflect that. If your income fluctuates, then that will be different each month as well. Doing a new budget every month, before it begins, keeping in mind the income and expenses unique to that month (doctor appointments, social obligations, seasonal activities, etc.) will put you in a position to succeed at budgeting.
4. We count up.
Most budget methods have you list your expenses, add them up, and then encourage you to stick to that number. This can be discouraging if after adding everything up your expenses are significantly more than your income. If you want your budget to work, then start counting down, meaning start with your income for the coming month and subtract your expenses until you’ve planned how to spend it all. And “spending” here also covers what you plan to save. This is called a “zero-based budget”. Income – Expenses = Zero. This may mean that some expenses wait until next month, eliminating spending more money than you have coming in.
5. We are not realistic when we budget.
If you underfund essential categories like groceries or leave out necessary expenses in your budget, then you are setting yourself up for failure. Be brutally honest about what expenses can and cannot be eliminated or reduced.
6. We leave out the fun stuff.
Even though we’re fearful about budgets being restrictive, we ensure they are by leaving out the fun stuff. If you have room in your budget, then allow yourself to spend money on clothes, entertainment, eating out, etc. We’re talking reasonable amounts here and only if you have the money to do it. Don’t forget about budgeting for pocket money as well. Setting aside money in these categories gives you something to look forward to and removes the potential guilt of swinging by Starbucks since, after all, your budget said you could.
…would you throw your phone or GPS out the window because you missed a turn?
7. We don’t include our spouse.
Married folks, if your spouse had nothing to do with creating the budget, they will not be likely to follow it. Figuring out the budget together is a must if you expect success. First, decide on a time to work on it together and put it on the calendar, or even send your spouse a calendar appointment. If you have a “reluctant” spouse, take the drudgery out of the process by having your spouse’s favorite snacks and drinks present, playing music, lighting a candle, (whatever appeals to your spouse), etc. Dare I say budgeting can be fun? If both of you make the decisions, you both will be more likely to follow it throughout the month since it’s “our” plan and not just “your” plan.
8. We give up.
We put together a budget. An unexpected expense comes up. We give up and declare budgeting doesn’t work. Don’t give up. It takes a few months to get the hang of budgeting. When we’re driving, we don’t throw the map out the window after a wrong turn. No, we go back to the map, consult it, and course correct. I know, no one uses a map anymore. Even better… would you throw your phone or GPS out the window because you missed a turn? If an unplanned expense comes up and it cannot wait, consult the budget and course correct.
If you’ve struggled with sticking to your budget, it could be due to any or all of the reasons we’ve covered here. I encourage you to make some tweaks and keep at it. Each month that you do will result in more confidence in budgeting and a greater sense of control over your finances.
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