I’ll be honest with you all. I have failed at budgeting A. LOT. I used to find them restrictive and at times too complicated. And I’m not going to lie and say I’m suddenly now an expert and have this budgeting thing down to a tee because that is not the case.
But you know what they say about learning more from your mistakes and failures than successes? Well, I learned a ton about why my budgets have failed. Hopefully, you can learn a thing or two from my mishaps.
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1. Unreasonable Budget
You’re living in a fantasy land and not being realistic about your budget. If you usually spend $1000 a month on groceries (like I was) and suddenly tell yourself to trim that in half… Well, that’s setting you up for failure.
And when you fail from these drastic demands — because you will — you suddenly lose all momentum to keep going.
You need to start small and trim in areas that you can. Perhaps cut 5-10% from flexible categories like groceries, dining out, entertainment, shopping, etc.
2. You haven’t analyzed your past behavior
To see where you want to go, you must analyze where you’ve been. Take a good, long look at your spending activity over the last six months or so. You’ll be able to see where you’re overspending and where you could allocate some of that money to pay down debt or add to your savings account.
I love using Mint to analyze my spending habits. It’s free (the best kind), and since you can link it up to all your financial accounts, you’ll be able to get a clear picture of your financial situation.
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3. You’re not setting realistic goals
Again, you’re not being realistic about what you want and what you’re capable of doing with your money. Start small and build from there.
If you’re eating out 3-5 times a week, aim to only eat out once or twice that week. That means planning for your meals ahead of time, so when there are time constraints, you don’t resort to takeout.
Take time to evaluate what it is you want to achieve with your money. Would you like to save more? Reduce spending? Pay down debt?
Having clear, realistic goals will help you to achieve them.
4. Be flexible and make adjustments where needed
You’re being too rigid with your budget, and when unexpected expenses pop up, you have no room for them.
There’s been many times where a relative passed away and we contributed money or special events suddenly pop up that required traveling and gift expenses.
Estimate budget amounts in these areas while giving yourself a reasonable cushion so you’re not freaking out when your budget is off balance. Your perfectionist side will love you for this.
5. You’re doing it alone
You need to get your husband on board. He needs to be aware of the financial situation you’re both in and take part in getting it on track.
If he’s overspending in areas and not balancing totals with you, you’ll never achieve budgeting success.
I know that whenever I mention “budget” to my husband, I can see his eyes glaze over, but as an equal member in this relationship, he needs to be involved.
It’s like being stranded in a canoe. You both need to row and work together to get where you’re going. If you’re paddling one way and your husband is paddling another way, you’re not gettin’ anywhere.
6. You don’t have an emergency fund
Emergencies and big unexpected costs are a part of everyday life. You should prepare for them.
I follow the teachings of Dave Ramsey, and he recommends having an emergency fund of $1,000 as part of his 7 Baby Steps to overcome money stress.
An emergency fund is for emergencies.
Perhaps your car broke down and needs to be fixed, or the furnace stopped working and needs to be replaced. Unfortunately, an awesome sale on makeup at Sephora is not an emergency — although, sometimes it feels like it is!
If you struggle with saving money, my husband and I were able to easily save using Acorns app. Feel free to use my link to get $5 to start your savings.
An emergency fund gives you control and makes it less likely you’ll rely on credit cards when these dire needs pop up. It prevents you from digging yourself further into the debt hole.
7. You didn’t keep at it
You gave up too quickly. You had everything planned to the dollar — no, penny, and because you didn’t execute this perfect plan, you gave up on budgeting. Or maybe you just thought things didn’t go according to plan, so you suck at budgeting; it’s too hard, and you want to give up.
Well, I’m here to tell you don’t give up! We never succeed at something the first try or even the second or third try! Keep at it, and you’ll soon find a budget that works for you. You’ll learn something from each attempt to use toward the next one.
Get to work
So set aside some time and turn off the distractions (like Facebook and Netflix) and dig out your financial statements. Start establishing a more you-friendly budget that will work for you, not the other way around.
Pretty soon you’ll see that having a budget is not restricting, but freeing because you’ll have a clear picture of your finances and more room to play around with it to achieve your financial goals!
So which one of these reasons is why your budget is failing? Let me know in the comments! If you found this post helpful, please feel free to share it!