Why Your Budget Will Fail – and How to Fix It

Tired of being broke?  Living paycheck to paycheck?  Never getting ahead?

If you want to get your finances in order, the first step is to set a budget.  Most people have no idea where their money is actually going. Creating a budget gives you the ability to tell your money where to go instead of wondering where it went.

Budgeting isn’t about restricting yourself; a budget actually gives you freedom because it gives you permission to spend.  It also puts you back in the driver’s seat so you’re no longer at the mercy of your money.

Here are some of the most common budgeting mistakes – and what you can do to fix them!

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Being Too Strict

If you set a $200 monthly grocery budget for a family of four, this probably isn’t going to cut it. (If you’re actually able to do this, please let me know your secret!). Setting your expenses unrealistically low isn’t helpful.  You’ll just overspend each month and then you’ll feel frustrated with budgeting.

My husband buys Starbucks and lunches out on a daily basis. I’d like to pretend he doesn’t, but if I did, we’d be over budget every month.  Instead, I include these things in our budget even though I’d prefer not to.

Ignoring Your Budget

Many people write down their budget, have a general idea of how much they want to spend on each category per month, and then never check in.  Having a written budget isn’t useful if you just write it down once and then forget about it.

Not Checking In Regularly

After you write down your budget, you need to check in on a regular basis.  Whether that’s daily, weekly, or monthly is up to you. Just find out if your spending is on track.  If you’ve spent too much money, dial it in! Alternatively, If you’re well under budget, that gives you permission to spend a little more.

You need to make sure you check in regularly so you know how you’re doing!  Otherwise, you still won’t be in control of your money even though you have a written budget.  

Forgetting Occasional Expenses

Another common budgeting mistake is forgetting about expenses that don’t occur every single month.  Here are a few examples:

• Birthdays
• Seasonal expenses (school supplies, Halloween costumes, Christmas gifts)
• Annual or semi-annual expenses
• Doctor appointments
• Veterinary appointments for your pets

To account for these, it may be useful to have a category in your monthly budget called “seasonal/occasional expenses”.

Leaving No Wiggle Room

You should try to account for every expense you can think of in your budget, but it’s impossible to account for everything.  You could forget about something or an unexpected expense (that isn’t a true “emergency”) may pop up.

Just in case, it’s important to leave a little wiggle room in your budget.  I call this line item on my budget “variable expenses”.

How much should you budget for variable expenses?

It depends on your unique situation and how comfortable you feel with risk.  If you’re a risk averse person, you may want to allow a large amount of wiggle room just in case.  

A risk taker, in contrast, might be okay with setting aside a smaller amount for variable expenses.

Do what works best for you!

From Budgeting Disaster to Master Budgeter

Budgeting may not come naturally to you, but that’s okay.  You don’t need to be super frugal or savvy with numbers to make budgeting work for you.  It will get easier with practice!

You’ll make some mistakes along the way, but you’ll learn from those and soon you’ll become a budgeting whiz!

If you need help setting up your budget, check out our budget bundle which comes with six printable worksheets.  These worksheets include:

1. Monthly Budgeting Worksheet
2. Debt Snowball Worksheet
3. Cash Envelope Tracker
4. Insurance Tracker
5. Net Worth Tracker
6. Savings Goals Tracker

Each worksheet includes instructions to guide you along the way.  Get the budget bundle now to take control of your money!