6 Budgeting Fails and How to Overcome Them

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Overcoming Budgeting Fails

This is a guest post from our friend, Jon Dulin, at Money Smart Guides.  Today, Jon is bringing you some excellent advice from his own experience with budgeting. He's tried all the apps and all the strategies, so don't waste your time doing the same... just read this post!  Take it away, Jon.

Read most articles on personal finance and they all agree that having a budget is a cornerstone of financial success.

You need to know how much money you have coming in and where it is going if you ever want to limit financial stress and build wealth.

But let’s face it.

Budgeting stinks.

It’s boring, it’s time consuming, and it’s hard.

Not just in the beginning either. 

While setting up your budget so you can start using it is time consuming, boring, and hard, it stays this way even when you are 6 months or 5 years in.

Because of this, many people skip this important financial step.

Including me.

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Years ago, I was ready to gain control of my finances. I was working a job I hated and was fed up with the daily grind.

I wanted more freedom in my life and decided that making a budget was the first step.

Things were great at first.

I was motivated to make a change and inspired by the books I was reading.

But after a while, that motivation faded. I didn’t look forward to working on my budget all of the time.

So I quit doing it. 

And my life continued on without any change. I still wanted something more out of life and I still hated my job.

A few months later, I gave budgeting another shot.

And this time it clicked. 

It wasn’t smooth sailing or perfect, but I was able to push through the difficult times and keep going.

What changed and kept me on track? A number of things.

And I am going to share with you my many budgeting failures and how I overcame them.

I believe that many others struggle in the same areas I did and by learning how I overcame these struggles, I hope you can create a budget and stick to it long term.

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6 Budgeting Fails That I Overcame

#1. Find the Right Budget For You

The most important thing that led to my success with budgeting was finding the right one for me.

You can read hundreds of books on budgeting and even more articles online about the best budget or how this method is better than any other.

But the only thing that matters is you find the right budget for you.

And unfortunately, this involves trial and error. 

You might have to try out 3 or 4 budgets until you find the right one for you. But if you stick with it, you will find it.

For me, I’ve tried close to 20 budgets. This isn’t because 19 were failures. I found success after 5. But I am always curious to what else is out there to see if it is a better fit for me.

The bottom line is you need to be open and willing to find the right one for you.

As I mentioned, you can learn about many budgets online. Because of all the searching I did, I created a list of my favorite 15 free budget templates for my readers.

By making the process of finding a budget easier, I hope they stick with it.

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#2. Have Specific Goals

Another important part of budgeting is to have specific goals. 

Ask yourself why are you budgeting in the first place. But don’t just settle for the first answer that pops in your head. You need to get detailed with your reasons.

When I first budgeted, my goal was to help me have money so I could quit the job I hated. This sounds like a good goal, but it was too broad.

I needed to ask myself what my life was going to look like with a different job.

When I stuck to budgeting the second time around, my goal was much more specific.

I wanted to budget so I could have the freedom to work for myself running my websites. I wanted to be able to work from wherever I chose and know that I was in control of my destiny.

I then used some visualization techniques to help me better see in my mind what that life would be like.

This helped me to stay on track for the long term. 

#3. Mindset

The next area where I failed with budgeting was my mindset. At first, I saw budgeting as a chore and something that was stopping me from enjoying life today so I could live a better life tomorrow.

Basically, I was guilty of FOMO.

And I get this from my readers all the time. They tell me tomorrow or next year isn’t guaranteed, so why not live for today?

My response is always the same. 

Tomorrow or next year or 20 years from now is not guaranteed. But chances are you will still be here. Also, just because you budget, it doesn’t mean you cannot have fun today.

You need to find a healthy balance.

When I was in credit card debt and trying to dig out, I was putting every spare dollar I had towards my debt. I only allowed myself $25 of fun money a month.

Guess what happened. I hated life and despised my debt.

So I made a change.

I allowed myself more fun money every month. This meant I wasn’t getting out of debt as quickly, but it also meant I could enjoy life today.

If this sounds like you, I encourage you to still give budgeting a try. Change your mindset to realize you can enjoy life today and still budget so that your tomorrow is just as good, if not better than today.

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Our friend, Kayla Sloan, went from earning $0 to $10,000 per month as a virtual assistant.  Now she's teaching how you can do it too!

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#4. Understand A Budget Is Not Set In Stone

After I made my first budget, I was so excited. I was ready to simply plug in my spending and watch magic happen.

But magic didn’t happen. 

I had spending in some categories that was more than I budgeted for. I had spending in categories I didn’t create.

It was maddening and one of the reasons why I quit.

I had to learn that no budget is set in stone. Life happens. Some months I had spending in categories I didn’t account for.

Other months I had too much spending in some categories.

The key was to go with the flow. I would overspend some months and this was OK. I just had to keep working at it and adapt.

And when I got married, my budget completely changed. And it changed again when we had our daughter and again when we had another daughter.

While it felt like I was starting over completely, I wasn’t. I had the lessons and tools learned from my years of budgeting that I applied to these new budgets.

Sure there were hiccups along the way, but I understood that life and budgets change. 

#5. Be Patient With Bi-Monthly Pay

When I first started to budget, I was getting paid every two weeks. This meant my pay dates varied every month and some months I got an extra paycheck.

The problem was my bills were due on a fixed date. 

With a moving stream of income and a tight money situation, it was stressful.

Added to this, I treated my third paycheck like a bonus and wasted most of it. 

Then when my bills were due, I had nothing to pay them!

It took me close to a year to finally come up with a plan to account for all of this.

I ended up looking at my monthly budget as a two-week budget for my bills so I could stay on track. I also worked on building a buffer in my checking account so I wasn’t living paycheck to paycheck.

Eventually, my company realized it could save money by switching to a plan where they paid employees on the 15th and 30th of every month.

This was a welcomed change and made budgeting much easier! However, I was grateful for the lessons I learned from being paid bi-monthly.

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#6. Innovate All The Time

This is related to the point above about your budget not being set in stone. But I wanted to break it out separately since it covers a lot.

To keep with budgeting long term, you always need to innovate and make the process more efficient.

When I began budgeting, I would sit down every day and update my budget.

But after I got the hang of it, I started to update my budget weekly.

This was a problem at first, as some receipts started to go missing. The solution was to create a place where I put all my receipts when I got home.

I also had to set a fixed date to complete my weekly budget. Otherwise, I would get busy and skip a week or two.

By making the change to weekly updates, it saved me time and I didn’t get burnt out with budgeting.

Another example is technology. 

When I started, the most technologically advanced budget was a spreadsheet. Now there are apps.

I gave some apps a try, but I enjoy a spreadsheet budget more. You might find an app to be more time efficient and this is your way to innovate.

Finally, over the years, I’ve strayed away from budgeting for every single dollar.

This isn’t because I don’t find value in budgeting. Quite the opposite. 

By budgeting for so long, my wife and I have a firm grip on our spending and we save close to 40% of our income every month.

There is no need to budget for our mortgage or other fixed monthly expenses because we have the money for it. Instead, we only budget for a handful of variable spending accounts.

For example, we love to dine out, so we have a monthly budget for this since we could easily go overboard on it.

Same goes for entertainment with our daughters. We can easily find things to do. But we need to have a budget just to be certain we stick within our plans.

Final Thoughts

At the end of the day, a budget is the cornerstone of getting your finances organized and getting ahead.

Thanks to having a budget, we are on track to retire early. Without a budget, there is no way this would be possible.

I encourage you to sit down and start budgeting. Just be sure to have an open mind and learn from the many failures I’ve experienced.

This won’t guarantee you won’t fail, but hopefully you will realize that while there are bumps in the road, the overall journey is more than worth it.

Jon Dulin

By Jon Dulin

Jon Dulin is a personal finance expert helping people improve their finances for over 15 years. You can read more of his work at MoneySmartGuides.com where he helps readers pay off debt and start building wealth so they can achieve their dreams.

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