Your budget should never be a failure. Detailed? Yes. Exhausting? Sometimes. But an outright failure? Never. And here's why.
Budgets should be created to suit your needs, not someone else's. They are there to help you, not hurt you. They are created as a guide to the happy place of your personal finances. Budgets will help highlight where your finances are going wrong so that you can change them to become stronger.
You're reading this because you're budget may not be working. Are you ready to fix it? Let's take a look at 11 reasons why your budget is failing.
1. There's no organization
Organization is key to getting a clear picture of your financial health. How much are you saving every month? Do you have an emergency fund? What percentage of your income is expenses?
Without organization you are essentially "winging it" which is not something you want to do when it comes to cold hard cash.
2. There is no game plan
Do you know what your long-term goals are with your money? Successful personal finance management is not just about having enough money to pay all of your bills every month. You should also be making strategic financial decisions about how much you spend on food, retirement, housing, fun, and everything else in between.
3. Your expectations are unreasonable
I hate to discourage you from reaching for the stars but sometimes our plans need a wake up call. If $2,000 is the most you can make every month and your goal is to save $10,000 then you'll probably run into a few problems or, at the very least, a TON of overtime work. Be hard on yourself but don't be stupid.
4. There are too many opinions and ideas
How many voices are you listening to when it comes to building your budget and financial plan? Multiple opinions may start to feel overwhelming. If you're trying to please everyone, that needs to stop right now. Heed only the sound advice you're given, then make sure your goals are in line with your future plans and that you're taking steps to see that goal fulfilled.
5. You have no patience
Patience is a virtue but it's also a necessity when it comes to money. The get-rich-quick success story is usually one in a million. I wish paying off debt happened overnight for all of us but it just doesn't. Be patient with your money and yourself or you'll burn out before you give yourself the chance to be successful.
(Pssssst! If you like this blog post, then you will love my book The Beginner's Guide to Budgeting, now available on Amazon.com!)
6. There's a lack of clarity and focus
This ties in with the game plan idea in Reason #2. How clear are you on what your goals are? "I want to save a lot of money" is very different from saying, "I want to save $10,000 by December 31." Make your game plan and then specify exactly what you intend to accomplish within that plan.
7. There's no reevaluation
People change and so do budgets. The budget for an unmarried woman is different from the budget for a married couple with four children. Make a habit of reevaluating your budget at the end of every month. This will help you identify what's working and what needs to be kicked to the curb.
8. You hate the budget you're using
There's a reason you hate the budget you're using and it might be because it was never intended for you. Are you using the 50/20/30 Budget Rule but aren't happy only saving 20%? Change it!
If you're paying off debt and have eliminated those weekly shopping sprees, then yes you are going to hate your budget for a while. But once you see your debt balance slowly decrease you will find happiness in your hard work and dedication. If you consistently hate the budget you're using, it could be time to reevaluate (#7!) and apply some modifications.
9. You have no confidence in your ability to follow through
If you don't think you're going to stick to your budget then you are exactly right. This type of mentality eventually turns into a self-fulfilling prophecy, where you convince yourself it was never going to be successful and you blow your rent money on shoes just to prove it.
Trust in yourself and your financial abilities. You made the budget because you were smart enough to realize you needed one. Following through is just the next step.
10. You aren't prepared for the unexpected
Pregnancies, flat tires, and leaky roofs all have the potential for being very unexpected. The first situation is the only one that is a joyful occasion, while the rest are rather unwelcome. This is where your Emergency Fund should swoop in to save the day. I can't tell you how many rainy day emergency bills we've had to pay on our Jeep. Thankfully, we're never caught in a bind because of our determination to save as much as possible.
11. Expenses are slipping through the cracks
What are you spending your money on? If you can't answer this question to the dollar then you need to start paying closer attention to your expenses. I'm a huge fan of using the Zero-Sum Method of budgeting because it requires you to have a purpose for every single cent you earn every month. Costs like daily Starbucks or weekly movie trips should be monitored and accounted for at all times. Don't let pennies slip through the cracks!
Look over your budget to see if any of these weaknesses can be found. Sometimes the difference between a successful budget and a failing one is simply identifying weak spots and making a slight modification.
The idea that you can't be successful with your budget is a lie that we tell ourselves to cut some slack on our spending and expenses. Your budget may not be pretty, but as long as it works for you on paper and you have the dedication to follow through, it should work for you in real life.
What are some of the other ways your budget might be failing?