Is Budget Failure Your Own Fault?

Budget Failure

An acquaintance of mine said to me once that “Budget failure is your own fault” when I asked why failure rates were so high amongst some people who try to use a budget then scrap the idea. I’m not so sure how much I agree with him but to a certain extent it’s not the budget that fails, it’s the operator of the budget and circumstances that surround it.

It’s no surprise that some people have no problem spending more than they earn but they are first to challenge all the reasons why they can’t get a second job or earn extra income to pay down consumer debts. Then again anyone would agree that not much elbow grease is needed to spend money as opposed to earning it.

When Cindy shared her story with us at CBB about how she changed her life after turning to credit cards because she couldn’t make ends meet she says, “it’s the one thing she wishes she had never done”. The greatest success for her was to budget and find a way to earn extra money working from home by making jewellery instead of giving up.

Failure Is Scary

Budget failure scares us a bit but we’re human and make mistakes just like everyone else does. A positive way to look at failure in anything we attempt in life is to learn from our mistakes and try again. Since we are both adamant on making sure we pay our bills on time and continue saving enough money for retirement, it’s important that we stay on top of our budget each and every week.

There are many ways to save money and managing your own money is one of the easiest forms of finding ways to save or areas to cut back on.

Last year I wrote a post about seven top budgeting mistakes and the top of my list was “You don’t have a budget”. I wrote that post not only for those that do budget but for those that don’t budget but want to budget yet don’t know where to begin. Budgets can easily scare people because they believe that a budget hinders their ability to “spend money” freely like they are used to doing.

They also believe that every penny has to be accounted for as if they were in money jail. It’s not a great way to look at your own money but if a budget helps us from spending more than we earn then it can’t be so bad, right? If blowing up your finances is a regular occurance  then maybe a budget isn’t such a bad idea.

When we started our budgeting journey it was the first time that we had ever set up our own excel budget spreadsheet on the computer. Budgeting had become a learning process for us both and we messed up at times but as we noticed the gains even if small that motivated us to stick to the plan.

We weren’t in any major debts when we began to budget aside from the mortgage nor were we on the brink of bankruptcy we just wanted to allocate our income into categories so we knew where the money was going and why. Answering the “why” question seemed easy at the time to ask but it really put things into perspective once you think about it.

Budgeting Questions

We sat together and wrote down a list of reasons as to why we need to budget and how we would make the budget work for us. As a couple who didn’t want money to ruin our relationship it was vital for us to make sure we were on the right page.

Sitting down as a couple for many people is probably the first barrier to getting the budget rolling so I always like to encourage couples to talk about money so they understand their financial feelings towards it.

The number one question you should ask yourself before you start a budget is why you want to budget because if you don’t have the same feelings towards budgets then you may end up on the side of budget failure. A budget only works when everyone is involved with the process. Anger and raw emotions about budgeting in a relationship where one or the other doesn’t agree can bottleneck success.

You’re Not Cut Out 

There are many people who simply are not cut out for budgeting and many people who fancy running numbers in their head and manage to keep themselves afloat that way. Personally I think the way someone tracks their money is their own business but I’m used to the budget sarcasm we get from some people.

It’s what we want to do and I suggest that anyone who wants to really know what their overall money picture looks like that they should at least give it a shot.

My Life Is A Business

Although a business budget is for a business I often equate our personal finances as our “Life’s Business” that we certainly don’t want to see fail. There are those people who do survive financially even if they use the “I know how much money” we have to spend each money tactic or “We are good with our money” so we don’t need to know where the money goes as long as the bills are paid.

We know, we did just that but we weren’t saving to the capacity we are today while using the budget which made a huge difference to our overall net worth.

I also believe that there are budgets that work and budgets that aren’t quite suitable for certain individuals. I have seen some budgets that are way over the top for us, pulling more information than we would ever need. Then there are easy budgets that didn’t quite give us enough information. We decided that we would learn how to prepare a budget so we could customize a budget template for us to use that made sense.

Do You Use A Budget?

Last week when I did a quick survey on Facebook asking the fans “Do You Use A Budget” and out of 18 responses 11 fans said “Yes, I/we always use a budget, 4 fans said “No I/we don’t use a budget” and 3 fans said “I don’t know how to use a budget” but want to learn how.

Jen a CBB fan who worked with me to prepare a budget for her family of 3  says, she can’t believe how much her life has changed since using a budget.

When people tell me they don’t use a budget because they don’t make enough money, my spouse doesn’t want to or they think it’s silly to budget and a waste of time it’s at that moment when I realize that nothing anyone says or does will change their minds. Sometimes it does take hitting rock bottom for someone to understand change is needed. Budget failure is your own fault when you set yourself up to fail before you have even begun.

If you speak negative about yourself or your own skills and say you will never get any better, they are better than me, life sucks, I’m no good at this, than you invite worry, stress, jealousy, anger and de-motivate yourself from ever firing through tough times. Don’t give up, get up and take charge, you ARE your own boss when it comes to your finances.

Why Budgets Fail?
  • You see a budget as a short-term plan rather than budgeting for life
  • You don’t understand why you are budgeting
  • You give up when you fail or make mistakes
  • You don’t take the budget seriously
  • You don’t work as a team if you are in a relationship
  • You talk negative about budgets
  • You fail to plan or set time aside to work on it
  • You feel budgets are for people who have debt
  • You feel budgets are for those with low incomes
  • You guess at your numbers and don’t take time to do your research
  • You don’t believe in yourself or your abilities
  • You fail to ask for budget help
  • You have unexpected Lifestyle Changes
  • You are not realistic when it comes to your numbers
  • You return to your old ways of wants over needs

Where I don’t believe budget failure is our own fault is when unexpected lifestyle changes takes over our finances until someone can figure out a plan of action. There are many people who have been injured on/off the job, diagnosed with illness or disease, chronic conditions, job loss etc all which can severely impact a budget with no prior sign that something will happen.

You could also find yourself as the caregiver for someone and stepping aside from full-time employment to help your loved one’s can impact your budget as well. Budget failure should not be looked upon as a set-back rather as an inspiration to try it all over again. Don’t freak out if you make mistakes, learn from them and understand that we all make them it’s what we do with them that counts the most.

Preparing an emergency fund for these situations go hand and hand with budgeting especially if you do not have insurances that cover you in the event of a situation that is beyond your control. If you’re not budgeting at least saving a portion of money for times when money is slim is better than having nothing saved at all.

Many lifestyle changes can have a drastic effect on anyone’s finances and sometimes telling someone to get out and get a job is easier said than done. Either way budgeting takes a positive attitude, knowledge, dedication and a desire to take control. I believe that a budget is vital in order for anyone to see their overall financial picture whether you are working or not.

Only you can answer why a budget has failed and perhaps understanding why it has failed and what you need to do in order to successfully implement a system that works for you means simply asking for budget help.

A budget isn’t going to solve all of your money problems in the blink of an eye but what a budget can do is perhaps give you a glimmer of hope that you are on the right track towards reaching your personal finance goals.

What other reasons can you think of that budgets fail?

Quote-Budget and Money

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. Well said Mr CBB!

  2. Great post Mr. CBB. I’ve finally, got my budget in order using Mint and it’s been a big eye opener for me. I use to make a lot of the excuses that you mentioned above but more than that I’ve found whenever I made a budget that was to complicated I would tend to give up a lot quicker. With Mint it does a lot of the work for me. Also I feel working together as a couple helps the situation out a lot as well.

    When I first setup my budget my wife was a little apprehensive about it since she felt as if I was only putting a budget together because she wasn’t paying the bills correctly, but after some long talks about our financial situation we were able to work through some of our differences. As a result our communication on our finances has helped us plan better and take a step in the right direction toward cleaning up our debts.

    • Good for you mate. It doesn’t matter what people use or what budget system they use to get the job done. As long as it works for you and it helps get you both to a comfortable place with your finances that’s all that matters. Cheers mate

  3. “When people tell me they don’t use a budget because they don’t make enough money, my spouse doesn’t want to or they think it’s silly to budget and a waste of time it’s at that moment when I realize that nothing anyone says or does will change their minds.” Great point Mr. CBB. I could not agree more. I know for me the light bulb did not go on until I hit bottom and actually wanted to make a change. I was willing to try anything out and after a million start/stops I finally got it down.

    • Cheers John and I’m sure you can look back and wonder why it took you so long to get it right. It’s not that hard at all but it does take time and practice to get it right. The most important step is the first step and if one can’t get past that then they aren’t going any further. Cheers

  4. We use a budget. It’s not a super strict budget and I don’t track pennies. Instead I know I want to spend max x amount this month. Our goal is to spend less than x. We also have a monthly savings goal we keep up with. Leftover money if any stays in the checking account.

    It’s wise to look at your current expenses and find out what you can cut. Do you watch cable? No? Cut it? Can you lower your insurance? Yes? Do it.

    MY next goal this month is to negotiate a lower car insurance rate. I am hoping I can cut $50-$100 every month of our monthly expenses.

    • Good for you and I like how you have goals to make cuts in your budget. The thing is there is no visual that you can even look back on over the months or years you then work with no data. The budget is like a bible about our finances or a diary for that matter. Sometimes we want to read back and see what life was like and how it changed moving forward. We can’t so that if we are guessing or just storing memories in our mind. Most of us would never remember numbers. I think as long as you are doing something it’s better than doing nothing at all. Most people I know get super excited once they “get” the budget and start adding in and tracking more numbers because now they really want to know more. That makes me happy!

  5. Nice article Mr. CBB! You listed the main reasons why a budget fails and I think that the operator is the one that has the power to kill a budget. If you have changes to your life, then your budget needs to change. Many people keep static budgets, but shouldn’t they be fluid?

    • That is true and with those life changes once they sort the problem out then the budget should get sorted along with it, that is correct. Our budget has changed so many times that I’ve lost count.

  6. mycanuckbuck says:

    I think you’ve covered them all! :) I wrote a short post on this, but it didn’t cover nearly as much as your post did.

    • Thanks mate. I’ve been talking about budgets for over a year now and I’ve read and heard lots about why people do and don’t budget and their emotions towards them. I’m sure there is much more to add to this post but for the most part budget failure is not bad at all we just need to use the failures as a platform to learn what NOT to do the next time.

  7. No one likes to fail and the word budget sends everyone into little seizure fits, but how many times do you begin something new and are perfect at it right from the start? It takes work just like everything else in life and is hardly ever instantly gratifying. You WILL make mistakes but it’s how you overcome them that speaks volumes of your character.

  8. I love your point about viewing your life as a business that you don’t want to see fail. Anyone who goes into business will read every book available and take every measure to account for every penny. When it comes to our own lives though that regimented discipline can easily go out of the window, yet when you think about it is anything more important than our own personal finances? Great post mate.

  9. I can’t even tell you how many times I started and stopped doing a budget. I think for me I didn’t make it a priority and it’s almost like a hobby that falls by the wayside. It took a serious awakening to make me do it, but now it IS a habit that has kept me from getting in financial trouble.

    • It really does become part of our financial lifestyle where the numbers are very important. I actually enjoy seeing where we are doing well and where we need to improve. It’s certainly a big motivation for me.

  10. Christine Weadick says:

    Very good article and lots of food for thought here to digest.

  11. In the past we’ve failed because we tried to set our numbers too low. We’d get discouraged and give up. I think it’s important to save money,but you can’t go from being a huge spender to spending almost nothing overnight. I think it helps to have goals and limits, but be able to change those if it doesn’t work.

  12. I love budgets; they keep me sane. Plus, after I pay all the bills and set aside money for our goals and emergency fund – I get to play with the leftover fun money! :) I hear many excuses as to why people don’t want to budget and mainly it evolves around their belief they will lose control of how they spend their money. I believe the exact opposite occurs. Now they finally GAIN control of how they use their money. They can see where it’s going and make adjustments if they see they’re spending too much in one area. Once they take care of all their obligations, they can use the remaining money on the things that matter most to them. I do think some people try to take on too much at once and create unrealistic budgets that they cannot meet, so they quit. Sometimes I think they do that on purpose too. We can be our own worst enemies, but thankfully, we don’t have to stay way – we can also be our own biggest champions. Great post, Mr CBB!

    • We felt the exact same thing as you. We felt more in control with the budget and making decisions to purchase something felt good as opposed to, can we afford it? We already know if we can and if there is money set aside in a specific category to make a purchase. It was the best thing we’ve ever done for our finances. Cheers mate!

  13. I love what you said here about sitting down and working it out together if you have a significant other, and also, about your life being a business. So true! For me, my attempts to budget failed for years b/c I felt like I was in money jail, just like you mentioned. Once I worked hard at changing my perspective and teaching myself that a budget is not a curse, but a blessing toward a better future, I began to see budgeting for the gift that it is. And I’m here to say that a budget can help you out of just about any debt situation, no matter how deep. Cindy and Jen proved that too when they shared their stories. Great post, Mr. CBB!

  14. Maven Cynthia Wilcox says:

    Sometimes things just don’t go as planned. Failure ( ouch that is a strong word) is a great chance for me to see what happened and how I can prevent it in the future. Overage in a certain area, like food/groceries, gives me a chance to find new recipes using the ingredients I have on hand to trim it back for the next month. Great article!

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  12. […] you and not against you. Introducing a budget slowly is much easier than dumping it on all at once. Budget failure is your own fault when you don’t plan to work through step by step how it should be incorporated into your daily […]

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  17. […] but stay together with a dedication to learn, grow and work together towards budget goals. Budget failure only occurs when you give up on the budget which should not happen as long as you give 100% into […]

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  21. […] Budget failure only occurs when you give up on the budget which should not happen as long as you give 100% into making sure you reach your goals. Sometimes fans email and ask me if setting up a budget in Canada is any different from living in other countries. To be honest I’m going to say, probably not. If I still lived in the UK I could use this exact budget to meet all of my needs. Below are links to the budgeting series which I wrote while designing our spreadsheet. […]

  22. […] Budget failure only occurs when you give up on the budget which should not happen as long as you give 100% into making sure you reach your goals. Sometimes fans email and ask me if living on a budget in Canada is any different from living in other countries. To be honest I’m going to say, probably not. If I still lived in the UK I could use this exact budget to meet all of my needs. Below are links to the budgeting series which I wrote while designing our spreadsheet. […]

  23. […] Budget failure only occurs when you give up on the budget which should not happen as long as you give 100% into making sure you reach your goals. Sometimes fans email and ask me if living on a budget in Canada is any different from living in other countries. […]

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