Why your Budget ISN’T Working

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It is easy to “attempt” to budget and want to give up when you don’t see immediate results. However, saving money and taking control of your financial situation takes a lot of time and there’s a normal learning curve! It’s ok to need help with a budget.

Before assuming your budget isn’t working; take a look to see if you are making any of the budget mistakes listed below.

Just because someone else’s budget works for them, doesn’t mean it is going to work for you. It takes time to learn your spending habits and your personal spending limits.

If you don’t already have a budget template for excel, sign up for my email list for a FREE budget template for google sheets! Additionally, check out my Ultimate Wealth Planner! I use this tool to help me with my finances, it could help you with yours.

Don’t give up just yet!

Table of Contents

You Spend More Than You Make

If your budget results in a negative number, before tracking your expenses, you are probably spending more money than you’re earning.

This is very dangerous territory. You should sit down and go through what you typically spend and make an adjustment asap.

There are only two ways to save more money.

Make more money
Spend less money

If you want to spend less money you need to either cut out luxury expenses or cut down on necessary expenses. Cutting out luxury expenses means stop going to Starbucks or buying new clothes for a few months. Cutting down on necessary expenses means renting an apartment that is slightly cheaper or shopping at Trader Joe’s and Sprouts instead of Whole Foods and Safeway.

You can also find ways to optimize your spending to make sure your spending habits benefit you.

If you’ve already cut out as much spending as possible but are still in the red. You might want to consider starting a side hustle to earn some extra income to cover your expenses. Unfortunately, sometimes the only way to save more money is making more money.

Related: What I Spend in a Week
Related: Tips on How to Budget and Save Money

You Missed Some Expenses

I think this is the most common budget mistake.

You can’t expect to be budgeting for a normal, all goes well, month of expenses. You have to include everything. Annual expenses, monthly expenses, weekly expenses, every once in a while expenses, everything!

It can be easy to forget things you only pay for every six months or every two years. I just recently realized I hadn’t included my CPA License renewal fees into my budget! This is something I pay for every two years and had completely forgotten to include it.

Make a list of all of your bills and make sure every last one of them is included.

Additionally, I would encourage you to set up a sinking fund for some of these categories that aren’t paid monthly; so you don’t worry about paying for them when the bill becomes due! Read this post to learn more about sinking funds!

Related: Most Common Budget Categories
Related: Start Changing Your Money Mindset

You Aren’t Tracking Your Expenses

If you are serious about cutting down on your expenses, you have to know which expenses you CAN cut down on.

At the beginning, learning how to budget is kind of a guessing game. You’re setting dollar amounts for each category based on what you assume you spend or what you hope to spend. But, budgeting is about what you ACTUALLY spend.

You won’t know where you can feasibly cut back without tracking your expenses. Yes, you have to actually go and write stuff down. This might seem annoying and tedious. But if you are constantly asking yourself “where did my paycheck go” and you want a way to save more money….

Well, to answer your own question you’ll have to track your expenses.

This step is important, especially at the beginning, because it lets you get to know yourself. It lets you get to know your own money habits and spending habits. Which is really important when it comes to budgeting.

Lastly, SHAMELESS PLUG! If you want the same budget template for google sheets I use to track my expenses, here it is! The Ultimate Wealth Planner.

Related: How to Track Your Expenses
Related: Things to Stop Buying to Save Money

You Were Too Strict

If you find yourself going over the “spending limits” you set for yourself, you might have been too strict and too aggressive with your savings goals.

Although I am all for saving the most money possible, if you’re actively trying to cut back on spending but continuously going over budget, that isn’t going to work.

You want your budget to be sustainable and represent your real spending habits. Sure, ideally we’d all spend less in certain categories. Instead of agonizing over spending too much in that one specific category and thinking your budget doesn’t work, change the number!

Don’t get too caught up in small specific categories. Instead look at the big picture.

You Didn’t Allow Yourself to Have Fun

Lastly! Ok, I know I said before that missing some expenses was the biggest budgeting mistake… I was wrong. This is the biggest budgeting mistake!

YOU DIDN’T ALLOW YOURSELF TO HAVE FUN!

Yes we want to save money, but we also want to enjoy our life! I got really into budgeting when I realized my budget gave me the freedom to travel way more often than before.

Budgeting is meant to be a plan. It’s meant to provide you peace of mind and decrease your financial stress. You know exactly where your money is going and you’re comfortable with where it’s at.

A budget is NOT meant to take all the fun out of life! Quite the opposite! Budgeting can show you it’s more than ok to spend on things that truly bring you joy. I created this blog to show people that being intentional with money will allow you to accomplish everything you want while still being prepared for the future.

So yes. Add fun stuff to your budget.

Some examples you ask?

My monthly budget includes categories like entertainment, eating out, travel and your budget should include those too!

Note: If you’re paying down debt or need to save money fast, these are the categories you should be cutting down in. However, in the long run, your budget should include these. Assess your situation and your money goals to decide what is right for you.

Related: How To Get Cheap Flights
Related: How to Save Money for Trips | Travel on Budget

Final Thoughts

Like anything else, budgeting has a learning curve. It’s ok to make mistakes! But if you’ve read through all these tips and made adjustments, I guarantee you’ll need much less help with a budget than before!

It takes time to figure out what works for you. Don’t get discouraged, the fact that you are trying and putting an effort into learning about personal finance already says a lot.

What have you found the most difficult about budgeting? Let me know in the comments below!

Is there a topic you want me to write about? Send me an email!

I can help with a budget you’re working on! Send me an email!