8 Reasons Why Budgets Fail

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Is your budget not working? Are you feeling frustrated because each month you find that you’re going over budget or worse…not sticking to it at all?  

Before we found Dave Ramsey’s Financial Peace University, we were clueless. I can remember making new budgets pretty much every paycheck. My husband and I were never on the same page, and we had no goals for our money. We were just living life…broke!

After learning how to budget, we figured out what we were doing wrong and how to fix it. So if you are feeling fed up with your budget, keep reading to see what you can do differently and get back on track!  

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Why budgets fail reason #1: Not enough income

If your expenses are higher than your income, that’s an obvious problem. What may not be so obvious is how to solve this issue. Is it simply you are spending too much? Or are you bare-bones budget and still don’t make enough?

If your answer is you are spending too much, you need to figure out where you can decrease your spending. Usually, the fun stuff is where your budget goes astray. So, I suggest you start there. Take a good look at what and how much you are spending on each of your budget categories. 

If you don’t have enough income, you obviously need to increase your cash flow. If your income falls short just this month or possibly next, consider picking up some odd jobs or selling unwanted stuff around your house. But, if this is a long term issue, you may need to pick up extra shifts, a second job, or a side hustle to increase your cash flow.

why budgets fail

Why budgets fail reason #2: Accountability  

If you want your budget to work, you have to stick to it. This is non-negotiable. Remember, a budget is a plan for YOUR money…you are telling it what to do and where to go.

So with that said, you should be tracking your spending…like balancing a checkbook. Track every penny you spend and compare it to what you have budgeted. 

If you’re married, you and your significant other must be on the same page about your finances. This is crucial. The budget needs to be done every month together. This helps to keep you accountable to each other.

Why budgets fail reason #3: Money mindset

Your money mindset is your attitude toward your finances. But this doesn’t just mean money. You have to find contentment in what you have. If you are always wanting more, you will never be satisfied.  

Start to question if you really need something. Are you just trying to keep up with the Jones’ or will it add joy and purpose to your life? Stop comparing your life to the life of others. 

Personally, I find this is one I struggle with the most, especially with social media so prevalent in our lives. But, by making a conscious effort, you will start to see a positive change in the way you think about and spend your money.  

Why budgets fail reason #4: Unrealistic

Your budget won’t work if it’s not realistic. When we first started budgeting, I remember getting frustrated with our grocery budget that I set. Money was tight, and I figured this was where we could recoup some of our spending. But, $250-$300 for a family of five was not realistic for us.  

I found myself going over budget with the groceries, which lead to a lack of motivation to stay on track with the rest of the categories.

Setting a realistic amount for your budget categories will cut down the frustration of going over-budget. If you find yourself with money left over at the end of the month, adjust next month. It’s better to have money left in your budget than to come in over budget at the end of the month.

Why budgets fail reason #5: No emotional attachment to your money 

Think about the times you have paid cash for something. Now compare it to when you have used a debit or, worse, a credit card. Can you tell the difference? Was it more painful to pay cash?

According to Scott Rick, Ph.D. in an article for Psychology Today, he states, “it is less psychologically painful to swipe a credit card than to physically hand over cash.” In this same article, Dr. Rick writes, “Credit not only helps to reduce the sting of payment, but there is some evidence that it also stimulates desire.”  

I don’t know about you, but I feel this in my soul.

When I use a card, I have no emotional connection to my money. Honestly, I am prone to spending more when I use a card unless I have a list and know my spending limit.  

So, I highly encourage you to use cash envelopes to feel that emotional connection to your money. Also, make sure you’re tracking your spending and comparing it with your budget.   

why budgets fail

Why budgets fail reason #6: No emergency fund

Not having an emergency fund will put you off course really quick. If you don’t have that money set aside for unexpected events, something as simple as a couple hundred dollars in car repairs can put you over budget and possibly into debt.

Therefore, it’s essential to get a starter emergency fund saved as quickly as possible. Dave Ramsey recommends $1000 in your emergency fund (Baby Step #1).  Now this will at least help cover any small emergencies that pop up until you can get your debt paid off or your 3-6 month emergency fund saved.

Why budgets fail reason #7: Not adjusting your budget each month

If you are not adjusting your budget each month, this could be a significant problem. Each month is different, so you should be accounting for that.  

Make sure to have a list of your fixed and variable monthly expenses and any annual bills you have coming up that month. Also, make sure you account for those birthday parties your kids are attending and any recreational activities you have coming up.  

It also helps to have a miscellaneous amount on your budget if you forget to budget something.  

Why budgets fail reason #8: No financial goals

The point of budgeting is making a plan for your money. This means you have to have goals for your money as well. If you don’t, there is no motivation to stay on track with your budget or manage your finances.  

You want to set goals that are specific and realistic. You also want to make sure to have a tentative timeline of when you want to achieve them.

Having specific goals with a deadline keeps you on course and motivated. You should be setting short and long term goals for your financial future.  


Budgeting is the best thing you can do for your financial future. But if you’re doing these eight things, most likely your budget isn’t working.

But, most people that are struggling are can be tricky in the beginning. But, having a plan for your money sets you up for financially stability in the future.

Hopefully, after reading this post, you can make the necessary corrections and get back to budgeting!  

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