Almost 80% of Americans who claim to keep a budget fail at it, according to CNBC. But the big reason why is completely avoidable. So what is the most likely reason for a budget to fail? And more importantly: what can you do to prevent it?
There are a lot of reasons out there that you’ll hear when talking about budget failures.
Some of the biggest reasons you’ll see out there are:
- your income is too low or expenses too high
- you’re not making proper adjustments in your budget and overspending
- no self-control
- unrealistic goals
But these and all other reasons for your budget to fail all have one thing in common.
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What is the most likely reason for a budget to fail?
You don’t have the proper discipline.
That probably hurt to read.
I know it hurts to read because it hurt me to hear that when I was getting started.
Me? Have no discipline? How dare you say that! Of course, I have discipline, or I wouldn’t have started a budget in the first place!
In reality, DECIDING to start a budget is the easiest part of budgeting.
The hardest part of budgeting is having the discipline to not only stick to it, but cut it down enough to meet your financial goals.
How to succeed with your budget with self-discipline
Ensure you and your partner are on the same page
Did you know one of the leading causes for divorce is not being on the same page financially?
Money issues can lead to some pretty bad fights in a relationship, so the fact that it leads to divorce doesn’t seem far off.
So how do you take such a heated topic like money and ensure that you’re on the same page?
- Be sure to talk to your partner when you are not arguing. You should both be in good spirits when you bring the discussion of starting and maintaining a budget to the table.
- Agree on the bigger points (like to start a budget or not, if you have any goals you’d like to accomplish financially, etc.).
- Once you have the big picture laid out, start working on the details. This means laying out what budget categories you want in your budget (should you have fun money? A fund for travel?) and how much the two of you think each category should receive (how much toward groceries? Gas?).
Stop setting yourself up for failure
You’re scrolling through Instagram and see that someone you follow is currently on a family trip to Hawaii. You start thinking through all of the fun things they’re doing on their vacation and how you wish you were doing the same. Before you know it, you’re down about the fact that they can afford it and you can’t.
Has that happened to you too?
It’s easy to set yourself up to fail your budget when you have so many things tempting you.
Some of those things are:
- Social media and comparing your life to someone else’s life
- Marketing emails, showing the latest products from your favorite brands, or a big sale
- Window shopping (just cruel)
If these things are causing you to fail at budgeting, then it is time to shut off social media for a while, unsubscribe to those tempting emails, and not place yourself in a situation where you want to purchase something out of your budget.
Find a budgeting method that works for YOU
When it’s time to get serious about creating a budget, you have to choose a way to keep your budget organized.
There are several different options out there to keep a budget, depending on your preference.
There are apps, spreadsheets, or good ole’ pencil and paper. Budget binders (pencil and paper) tend to be more popular since it’s the most active budgeting method: you have to physically write in your budget.
But, it’s important not to start a budget using what most people use for budgeting, in hopes that it will work for you too.
Try out each method to see what works best for you and your budgeting style. And most importantly: something you will WANT to keep up with!
Constantly make adjustments to your budget
Unfortunately, a budget is not something to set and forget. You will always need to make adjustments to it, even if it’s just adjusting how much your bills are each month and leaving your other budget categories alone.
I like to check our bills at each paycheck for the next two weeks (pay period). I make sure that all of the bills that are going to be auto-drafted during that pay period are accurate in our budget spreadsheet.
You might also have to make adjustments based on where your life is at the moment.
Maybe you’re paying off debt and you want to kick that into high gear. In that case, you might want to take all of your budget categories down to bare bones so you can apply the maximum amount toward debt.
Or, perhaps you’re doing something FUN with your money, like a vacation! You will likely want to save as much as possible as quickly as possible, so you make big sacrifices in your budget for a little while.
It could even be that you just finished a huge financial goal and want to be more lenient, so you add more to your fun categories and restaurant funds.
Whatever your circumstance, you’ll always need to make adjustments to your budget. Otherwise, you are setting yourself up for failure.
This was a big one in our family.
I hate meal planning. I wish I liked it more, but that’s just the way it is.
So, each paycheck, I’d allot so much toward groceries. Then, we’d grocery shop and just buy whatever, with the intention of basically having chicken and vegetables for every meal.
You know what gets old quickly?
Chicken and vegetables every single day.
So we’d pick up fast food to change it up. And that money that we used for fast food sent us over our budget.
That happened EVERY PAYCHECK!
Finally, we got our act together. We created a master recipe list, which allowed us to quickly choose our meals for the pay period. That was our turning point for sticking to and even REDUCING our food budget!
All of this to say, the food budget is where a lot of people slip up. It seems minor enough to not make a huge impact, but each fast food trip or item outside of your grocery list adds up quickly.
Wrapping it up
It turns out that the most likely reason for a budget to fail is something we have complete control over!
In a way, that can be both good and bad: it’s good because it’s within our control, but bad because that total mindshift can be tough to do.
But once you’re ready to go all-in with your budget, know that there are ways you can set yourself up for success!
Have you had any failures with your budget, but learned an important lesson from it?
I’d love to hear from you in the comments!