Why You Can’t Stick to a Budget (And How to Get Over It)

by Alexa Mason · 11 comments

You’ve read all the financial gurus’ books. You set up a fancy spreadsheet to track your spending. You follow 20 personal finance blogs. You’ve even switched to a cash envelope system. Still, your budget just isn’t panning out.

Sound familiar?

When I first got serious about personal finance, I dedicated myself to following all of Dave Ramsey’s teachings. You know: ditch the credit cards, pay down debt, focus on frugality, and use a cash envelope budgeting system.

Paying off my debt and swearing off credit cards was the easy part, but when it came to budgeting, I failed miserably.

I’ve tried many different budgeting methods over the past seven years, and I’ve discovered there’s no “one size fits all.”

Here are three common budgeting problems you might have (and how to solve them):

1. You can’t stick to the cash envelope system

Neither can I. My first personal finance strategy was simple: follow all of Dave Ramsey’s advice.

The problem, though? Ramsey claimed I would feel the sting of spending cash — but I didn’t. To me, letting go of cash was simple and, therefore, it went fast. My cash envelopes would be depleted before the month was halfway over.

For me, using my debit card was painful. I’d be extra cautious before swiping, because I knew the money was coming out of my bank account. Then when I balanced my checkbook, I’d feel that sting again.

Solution: Using the cash envelope system can be beneficial, but it’s definitely not for everyone. If you spend cash like you drink water, then try using your debit card. You can link your checking account to a free service like Mint.com and monitor your spending in different budget categories.

2. You think budgeting is too complicated

Budgeting is only as complicated as you make it.

Some people are awesome at plugging numbers into fancy spreadsheets and staying on top of every penny that comes their way. To them, budgeting is fun.

Just because somebody else uses a fancy spreadsheet doesn’t mean that you need to — especially when you’re just starting out. For most people, the simpler the better.

Solution: Trick yourself into budgeting. Set up your bills with automatic payments, and have your savings (for short and long term goals) automatically taken out of your paycheck. By doing this, there’s virtually no work for you. You won’t have to worry about budgeting, because all of the important stuff is already taken care of. However, if you do this — it is also important to check your accounts at least once a month to make sure you’re not being overcharged for anything.

3. You have a budget deficit

I’ve been there. It sucks.

You’re not making enough money to pay all of your bills. Something’s gotta give, and you’re not sure what it is. You have no breathing room.

In this case, it’s important for you to focus on the things you can control.

Solution: Take a good look at your finances and cut out all the non-essentials. If you still have a deficit, start by paying for the basics: food, shelter, utilities, and transportation.

If you have money left over after that, cover your debt. Pay at least the minimum payments, so you’re not hit with late fees. Negotiate on any bills possible. And then start looking for ways to earn more money. Take a second job, work more hours, or freelance. If you need to, apply for temporary government assistance until you get back on your feet. Concentrate on the things that are in your control, and do what you have to do.

These are the budgeting problems I’ve come across over the past few years. When it comes to budgeting, there’s no single solution for everyone. Learn as you go, and develop a system that works for your life.

What budgeting problems have you come across, and how did you solve them?

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{ read the comments below or add one }

  • Wendy says:

    We don’t really budget, per se, but fortunately we both have simple tastes. No debt at all, flat is paid off, no car, investment and retirement funds, 1 year of income in the bank that’s easy to liquidate, and we never go into debt to pay for our holidays abroad.

    I would like to say though, to those who want to skimp now and save for retirement. Do enjoy life now, too! Both of my parents died before reaching age 60, and my mother-in-law died months after her husband retired. They’d skimped and saved all their lives to travel, but after his wife died, my father-in-law never really travelled at all before his death. No one ever minds inheriting money, but it would’ve been nice to see my father-in-law enjoying at least some of those savings…

  • I think your 2nd method (transferring a percentage of your paycheck to a savings account) is the easiest one to follow and stick to. Cutting down on bills that are not necessity such as premier cable channels, magazine subscriptions, and etc. is also great.

  • Gary Kerr says:

    Making a budget may sound like a boring or frustrating job but it is very much important if if see through the financial side. To make a budget it is necessary that you have all the information about your income and expenditure. But it is a nice way to have control of all your financial needs.

  • Cathy says:

    OK, that makes sense. I’ve been budgeting backwards. I look at the credit cards and loans first, then do the basics. That’s why I always run out of grocery money before the end of the month. Thanks

  • M. Catlett says:

    The envelope system doesn’t work for us either, but I still like the idea. Ramsey’s snowball plan (http://www.daveramsey.com/article/get-out-of-debt-with-the-debt-snowball-plan/) works well for us though.

    The key for us is part of #2 – getting the bills and saving money away from the spending cash as soon as possible. Out of sight, out of mind.

    Thanks, enjoyed the post.

  • Phil says:

    I have been using Dave Ramsey’s system since early 2007 (I know, because I still have the budget sheets 😉

    Several things that have jumped out at me:

    1. I don’t use the envelope system. We have categories, but they are not envelopes. Our daily spending goes into three different categories: Family, My Wife’s “fun” money, and my “fun” money. We use debit cards, and then we write down everything we spend. These are on colored paper (pink for her, blue for me, green for family). And nothing gets by me.

    I tried the envelope system, but was going nuts. All this cash laying around, not really being sure how much I had left. Lot’s of coins, aka change.

    2. Having a budget is actually giving you freedom, not taking it away. I am a school teacher, and my wife also works for the school district (gets paid the same as a teacher). When we retire in 25 years we will have $3,000,000 in our retirement accounts, and have a pension. We sacrificed to get there (just ask my wife-LOL!), but it is worth it.

    3. Give yourself time to practice. Your first budget is not going to work. Your second month will be better. I think it took me 3-4 months to have something manageable. Stick with it.

    4. Have a monthly budget meeting with your spouse. Mine lasts about 30 seconds, because that is when my wife says it over (LOL again!). But we are in agreement.

    5. 5-7 years from now, or sooner, take pride of the fact that you have paid for cars, $30,000 in your checking/savings, and a large retirement fund. That may seem like a long time away, but now that it has passed for me I am surprised how quickly it has gone by.

    6. Live (sacrifice) like no one else so later you can live (enjoy) like no one else. We are buying a boat this summer and bought camper last summer. Life is good, and is only going to get better from here. But you have to pay the price to win.

  • Gousalya says:

    I always instruct 10% of my income into another account. That way I trick myself to think the balance 90% is 100% of my paycheck. It works most times…..

  • Michelle C says:

    If you aren’t using YNAB, START! It is the best method for budgeting and you will stick with it, and even think it is fun after a while.

  • I think a key to this is really finding what works for you or modifying something so it does. We do budget and use a modified cash envelope system, but we’ve made it so it works for us. It may not be the “true” system Dave Ramsey promotes, but it works for us and I guess that’s what counts. 🙂

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