min read
· Posted on
February 21, 2024

4 reasons why your budgets keep failing

Beware the budgeting booby traps, which many of us can get tangled into.

What's the key learning?

  • It's important to have a positive mindset when it comes to your budget.
  • Before you start your budget, take account of your income and expenses.
  • Set yourself clear goals to hold yourself accountable to your budget.
  • Reward yourself along your budgeting journey.

Dreamy-eyed-you entered 2024 with a house deposit in mind, and overflowing motivation to create a budget to get yourself there.

But three weeks into January, you’ve overspent on iced coffees and wondering why on earth you signed yourself up for this.

Don’t stress, we’ve all been down this road before. As they say in the classics “failing to prepare is preparing to fail”. And with budgeting, it’s also true. 

So here are a few of the traps to… un-trap yourself or to untangle your messy start to 2024.

Trap 1: You don’t have the right mindset around your budget:

“Budgeting” gets a bad rep. The word can often have negative connotations attached to it, which can make you feel like you’ve indulged in something sinful if you don’t hit your budget.

And if that belief takes hold of you, you might feel as if that's a reflection on your character.

The first budget you make is never going to be your best one. 

Just like how the first time you wore a formal dress back in Year 11, it maaaybe wasn’t your best look. But over time, and with more experience, you’ve found your own style.

In the same way, the more times you try to create the right budget, the closer you get to having a budget that adds value to your life.

A budget is never meant to be a money prison, but if you go into it expecting it to suck, then you won’t be successful.

Trap 2: You don’t know what you’re working with

Many people start their budget by taking their best guess of their income and regular expenses, and slapping those numbers onto a piece of paper or into an excel sheet.

Trying to gaslight myself into believing I’ll only spend $20 on coffee a week

Then life throws in some unexpected car damage, a couple of wedding presents, and a few too many unplanned dinners, and that budget starts looking further and further from reality.

Without tracking your expenses, the numbers in your loose-budget will be inaccurate, and you’ll be consistently frustrated with your budget.

If you want your budget to work, you’ll need to be a little bit savage with yourself.

Take a look at your transactions from the last two-three months to get an idea of your actual spendings.

This step is easy peasy through the Flux Budgeting Tool (if you haven't used this tool before, click here) - you’ve got your transactions from all your bank accounts in one place.

Once you have an idea of your actual regular expenses, be sure to add a buffer so you don’t stress yourself out during months that are a little more exxy. 

Trap 3: You’re setting your budget without clear goals

Creating a budget is good and well, but what’s keeping you accountable to it?

If you don’t have goals in mind that you’re budgeting for, it can be hard to stay motivated. 

Maybe you’re trying to build up your emergency fund, or maybe you’re saving up for a new car, or a house deposit.

Having a clear goal (or a couple of goals) and a timeline around when you hope to achieve it will help you stick to your budget like super glue.

We recommend setting some short-term goals (up to a year) that you check-in with every quarter, while also setting a long term goal with a 5-10 year timeline that you can slowly chip away at.

Trap 4: You’re not rewarding yourself along the way

You’ve gotta take a moment for the small wins. No seriously; there’s science behind this. 

Our brains are wired to do more of what we’re rewarded for, which is why giving yourself some positive reinforcement along your budgeting journey will help you achieve your goals.

Find ways that won’t break the bank to reward yourself for small wins along your budgeting journey.

As you should!

You might take yourself out for a meal whenever you sit down to do your budget, or have a date night with your partner for every money goal you hit together.

There are plenty of ways to make the budgeting journey fun, and it’s a great excuse to get out of any undesired weekend plans. 

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