Month: August 2020

  • 9 Reasons Your Budget Isn’t Working

    Like many people, my first attempts at budgeting were a complete failure.

    I would get really motivated to get my finances on track and spend a ton of time putting together a budget. 

    But then, one thing would go wrong, and I’d completely abandon the entire thing. It was an endless cycle that repeated itself every few months. 

    When I finally started getting serious about personal finance, I was able to look at my budget through a more holistic lens and figure out why it had failed in the past. 

    In this post, I’m sharing some of the mistakes I made in my own budgets and some of the reasons your budget might not be working.  


    9 Reasons Your Budget Isn’t Working


    You aren’t being realistic with your expenses

    One of the most common reasons that budgets fail is that people just aren’t realistic when they’re making a plan for their money. 

    Here’s what happens most often. Suppose I start tracking my expenses and realize my husband and I have been spending $750 per month eating out. I panic and start budgeting $50 per month for eating out. 

    Do you see the problem here? For a couple who spends a lot of money on eating out, cutting out almost all of it at once just isn’t realistic. 

    Another area I see people make an unrealistic budget is when it comes to groceries. People try to drastically cut their grocery spending but budget too little. And then they end up not being able to stick to it. 

    Instead of planning your budget around what you wish you spent, start by planning it around what you actually spend. Then you can slowly start cutting back in the areas you want to.

    Read More: How to Create a Monthly Budget That Really Works


    You aren’t budgeting for fun money

    If you aren’t leaving room for fun in your budget, you’re going to have a hard time sticking to it. 

    I know plenty of personal finance experts who push people to cut back in every area possible, especially when they’re paying off debt.

    But time and time again, I talk to people who have tried that kind of budgeting and have burned out. 

    Leaving some room for fun money in your budget will help to make sure the process isn’t a miserable one for you and will make budgeting a lot more sustainable in the long run.


    You aren’t planning for occasional expenses

    Have you ever had a month where you’re totally rocking your budget, and then your annual Amazon Prime membership comes due, or its time to renew your vehicle registration? 

    Because it’s not a regular expense, you totally forgot to budget for it. Now it’s thrown off your budget for the entire month.

    It’s easy to remember to account for the things you spend money on every month, but far too easy to forget those irregular expenses. 

    So what’s the best way to deal with those expenses?

    Sinking funds. Rather than budgeting for your entire Amazon Prime subscription in a single month, divide the entire amount by 12, and set aside money for it every month. Then, by the time it’s time to pay, the money is budgeted. 

    Sinking funds are great for so much more than just annual subscriptions. Here are some expenses you might have sinking funds for:

    • Vehicle registration
    • Car repairs
    • Car insurance
    • Home repairs
    • Christmas
    • Medical bills
    • Pet expenses
    • Vacation
    • Association dues
    • Clothing
    • Car replacement
    • Weddings
    • Tuition
    • Annual subscriptions


    You aren’t tracking your spending

    Making a budget is a great first step. But if you don’t actually track your expenses to make sure you’re sticking to it, then it really doesn’t do a whole lot of good.

    This is the problem with a lot of budgeting apps out there. You spend a ton of time setting up your budget. You get excited about finally getting on track with your finances. 

    But then, if you’re not proactive about tracking your expenses, you have no idea if the budget is actually working. 

    This step is most people’s least favorite part of budgeting. But it’s also a critical step to make sure you are sticking to your budget.


    You spend more than you make

    Budgeting is a great way to take get control of your spending and be intentional about where your money is going. But things can go off the rails if your budget includes spending more money than you actually make. 

    This leads to an endless cycle. You get paid but then end up spending all of the money and more. Because you don’t have enough money to cover your expenses, you end up putting some of them on a credit card.

    Now in the future, you’ve got to budget for your existing expenses, as well as your credit card bill.

    In reality, there are only two ways to fix this problem: decrease your spending or increase your income.

    There are a number of ways you can reduce your spending when you’re on a tight budget. You also might consider picking up a side hustle to help you make some extra money to cover your extra spending.


    You’re struggling with impulse or emotional spending

    Even the most well-planned and well-intentioned budget will go off the rails if you can’t get your impulse spending in check.

    For some people, impulse spending is simply a result of a lack of dedication to their budget. For others, it’s far more than that. 

    If you’re struggling with emotional spending, a budget alone probably won’t help you to get back on track. Instead, it’s time to get to the root of why you’re spending. 

    During and shortly after my first marriage, I spent a lot of money. Seriously, I could not stop shopping. Every time I felt lonely, anxious, sad, or any other myriad of emotions, I would shop. 

    And while learning more about money helped me make progress in other areas of my finances, it wasn’t until I dealt with the feelings that were causing me to shop that I was able to stick to my budget.


    You and your partner aren’t on the same page

    If you share your finances with a partner, then your budget is dependent on both people being committed. And if you and your partner aren’t on the same page, then it’s easy for things to get off-course.

    When you share finances with a partner, communication is critical. You and your partner have to get on the same page if you’re going to have a successful budget. 

    If you’re the budgeter in the relationship, talk to your partner to make sure they feel included in the process. If one of you is overspending, work together to come up with some strategies to get back on track. 

    Finding the right budgeting app that the two of you can use together is a great step in getting on the same page and making sure you’re both included!


    You don’t have an emergency fund

    Failing to have an emergency fund is one of the quickest ways for your budget to get off track.

    In a perfect world, emergency expenses wouldn’t happen. Unfortunately, they’re something that we all have to deal with from time to time. 

    And if you don’t have an emergency fund, then you’re forced to find room in your budget to cover the expenses in the month they come up. 

    Because most of us don’t have wiggle room in our budget for an emergency, this can throw your budget off not just for one month but for many.

    If you don’t currently have an emergency fund, make this your first financial priority for the next few months. At the very least, set aside enough money to cover a month of expenses. 


    You aren’t being flexible

    Perhaps one of the biggest mistakes I see people make is expecting their budgets to look exactly the same every month and then giving up when they overspend in one category. 

    First, know that your budget doesn’t have to be the same every month. One of the biggest problems with many budgeting apps is that you create your budget and then are expected to use it every month. 

    I don’t know about you, but every month is different for me. In a month when several friends have birthdays, I might spend more money on eating out. But in a month where I’m staying home most nights, my grocery budget might go up. 

    Just know that it’s okay for your budget to adapt to whatever is going on in your life at the time.

    The other problem people have is that when they go over budget in one category, they think their whole budget is shot. That’s not the case at all!

    Listen, we all have a finite amount of money to spend each month. But it’s okay if you don’t end up spending it exactly as you thought you would on the first of the month. 

    Did you go over budget on eating out? No problem. Just find a different spending category that you can cut back on a little bit. 

    As long as you spend within your means, your budget is working. The mark of a successful budget doesn’t have to be that you stuck to your original plan 100%.


    Final Thoughts

    Getting started with budgeting is one of the biggest hurdles you have to jump when it comes to getting your finances on track. Unfortunately, it’s also one that people most often give up on. 

    The good news is that if you can figure out why your budgets have failed in the past, you can avoid making those same mistakes again.

  • How to Stop Procrastinating on Getting Your Finances In Order

    I’ve always been a bit of a procrastinator. I was that kid in college staying up late the night before a big paper was due. 

    I was no different when it came to money. I spend years procrastinating on getting my finances in order. I didn’t budget, I didn’t have financial goals, and I didn’t make anything more than the minimum monthly payments on all of my debts. 

    When I finally stopped making excuses and started taking action, my situation changed dramatically. Not only did I finally take the time to learn what I didn’t already know about money, but I saw my savings grow and my debt shrink

    In this post, I’m sharing seven tips to help to stop procrastinating on your finances and finally start making money moves. 



    Start before you’re ready

    One of the most important rules I have for my biggest goals is to take messy action.

    Listen, you’re never going to feel ready to start getting your finances in order. And if you decide to wait until you make more money to start budgeting, you won’t know how to budget when you eventually make more money. 

    If you say you’ll start setting financial goals when you have money in savings, you may never have more money in savings. 

    It’s in those early days that you don’t feel ready that you can make the biggest difference in your finances. 

    So next time you find yourself putting off financial tasks because you don’t feel quite ready, just remember: Take messy action.


    Choose one thing to focus on at a time

    If you’ve never taken steps to get your finances in order, it can feel overwhelming to think about all the things you’ll have to tackle. Budgeting, saving, paying off debt, investing, etc. It’s definitely enough to make your head spin when you’re brand new.

    If you keep putting off getting started because you’re overwhelmed with everything there is to do, choose just one thing to focus on at a time.

    It might seem counterproductive, and you’ll probably feel like you should be doing more. But making moves in just one area of your finances is far better than taking no action at all. 

    If you’re just getting started on your finances, begin by tracking your income and spending. Once you know how much you’re making and where your money is going, you can look for overspending.

    And when you start identifying that wiggle room in your budget, you can start diving into saving and increasing your debt payments. 


    Set specific financial goals

    It’s hard to get motivated about anything when you’re not really sure why you’re doing it. Money is no different. How are you supposed to stick to your new financial plan when you have no idea what your end result is?

    When you have a specific financial goal, and you know exactly why you want it, it’s so much easier to stay motivated and stick to your financial plan, regardless of how lofty of a goal it is. 


    Put it on your calendar

    Sometimes our procrastination is simply a result of the fact that we keep telling ourselves that we’ll sit down and come up with a financial plan…and then we forget. 

    Don’t be too hard on yourself — it happens to the best of us!

    I’ve found that once I put something on my calendar, I’m almost certain to get to it. Even if I can’t get to it on the exact day I scheduled it for, I’m going to get it done within a day or so. I just can’t stand to have incomplete items on my to-do list!

    I recommend setting time aside on your calendar each week to check in on your finances. If you’re just getting started and aren’t paying any attention to your money, schedule yourself a money date on an evening when you’ve got no other plans. 

    This will allow you to really get a headstart on your finances, and having it on your calendar will make sure you get it done!

    The important thing is to treat this calendar event just like any other. You wouldn’t cancel on plans with your best friend, so don’t cancel on plans with yourself. 


    Automate as much as possible

    Have you ever told yourself that you’d start putting money aside to build an emergency fund, but then you never seem to have any money left at the end of the money?

    What about telling yourself you’re going to start investing but never getting around to making those transfers?

    The good news is that these financial tasks, and many others, are pretty easy to stop procrastinating on. You can stop procrastinating by automating. There are plenty of tasks that you can automate, rather than giving yourself the opportunity to procrastinate. 

    For example, you can automatically have money transferred from your checking account to your savings account the day after you get paid. That way, you don’t give yourself a chance to spend it first. 

    You can also automate things like retirement contributions and bill payments. 

    Read More: 6 Easy Ways to Automate Your Finances


    Leave room in your budget for fun

    I’ve found that one of the biggest reasons people procrastinate on getting their finances in order is that they fear that a financial plan will be too restrictive. They assume they’ll have to stop shopping or eating out once they get on a budget, so they put it off. 

    Well, I’ve got amazing news for you. Budgets don’t have to be restrictive at all. In fact, I actually find budgeting to be even more freeing. It allows me to spend money freely on things that I love. And I never have to feel guilty about it, because I’ve budgeted for it. 

    If you’re procrastinating on getting your finances in order because you’re worried about how restrictive it will be, remember to leave room in your budget for things that bring you joy. 

    For me, those things are eating out and seeing live music. It’s probably going to look different for you, but your budget should reflect the things you love!


    Final Thoughts

    Taking control of your finances feels like an uphill battle when you first get started, and it’s easy to come up with reasons to procrastinate. But the sooner you start taking action, the sooner you start seeing results. I hope these tips will help you to push your procrastination aside and starting taking real action.

  • How to Talk to Your Partner About Money Without Fighting

    In many relationships, money is a major point of contention. Couples fight about spending habits, overwhelming debt, and other financial struggles. Unfortunately, money can become a topic of resentment.

    When Brandon and I started talking about money, I didn’t want to fall into that trap. I wanted us to be on the same page and to be able to talk about money without fighting.

    From the beginning, my husband and I have always prioritized approaching our finances as a team. This allows us to be proactive about our money talks, set financial goals together, and talk openly without fighting.

    In this post, I’m sharing how to talk to your partner about money without fighting. These are all the tips that my husband and I have implemented in our relationship to make finances an easy topic.


    How to Talk to Your Partner About Money Without Fighting


    Be proactive — Don’t wait for issues to arise

    One of the reasons that money can be such a point of contention for couples is that they wait until there’s an issue to start talking about money.

    Rather than waiting until there’s something to fight about, I recommend having a regular money date with their partner. This allows couples to cover any potential areas of conflict before they get to that level.

    You can use money dates to cover topics such as the monthly budget and progress on your financial goals.

    Plus, money dates can actually be really fun! It’s a way to sit down together and dream about all the fun things you’ll do together with your money.

    Read More: What is a Money Date + Why You Should Plan One Now


    Make financial decisions together

    One of the most important ways to reduce money conflict is to make sure you both have a seat at the table. 

    In any relationship, it’s natural that one partner will handle more of the day-to-day budgeting. It’s probably whichever of you gets excited about spreadsheets and budgeting apps. 

    I’m definitely the person in our relationship who gets more excited about budgeting, so I manage our finances throughout the month. That being said, we make all of our decisions together. 

    Each month we spend some time talking about our spending from last month, what we have coming up in the next month, and anything important that has come up.

    When one person makes all of the financial decisions or controls the budget without feedback, it’s sure to lead to conflict.


    Be honest, even when it’s hard

    Statistics show that more than 40% of Americans have committed financial infidelity. In other words, they’ve hidden bank accounts, debt, or spending habits from their partner. 

    Lying to your partner about money isn’t just problematic for financial reasons. It can also be incredibly damaging to your relationship. It can destroy trust and make it hard to get back on the same page financially.


    Set shared financial goals

    One of the biggest things that has helped my husband and me to get on the same page with our finances is to set shared financial goals. It helps to take the drudgery out of money management and actually make it fun!

    First, setting a financial goal gives us a common objective. While we were engaged and just married, our financial goal was to save for our RV to travel the country together. Not only did it make it genuinely fun to talk about money, but it also helped to give some direction to our budget. 

    Read More: How to Set Financial Goals: A 7-Step Guide


    Hold each other accountable without judgment

    One of the great things about having a partner in your goals is that you have someone to hold you accountable.

    I’m not saying you should babysit one another or monitor each other’s spending. But when you’re working toward shared financial goals and the budget starts to get off track, you can remind each other what you’re working toward. 

    Just remember that as you’re holding each other accountable for your goals, do so without judgment. If you’re trying to save money for a new car and your partner splurges on an unplanned lunch with coworkers, try not to approach it with judgment or anger.


    Remember that you’re on the same team

    I know how tempting it can be to lead with confrontation when you and your partner aren’t seeing eye to eye or when one of you hasn’t been sticking to the budget. But I also know how unproductive that can be.

    When you talk to your spouse or partner about finances, always remember that you’re on the same team.

    You ultimately both want the same thing, which is a happy and successful relationship. Even if your spending habits or financial goals look a bit different, there’s still common ground there.


    Final Thoughts

    Talking to your partner about finance doesn’t have to be as hard as it sounds. For many couples, money can be a point of contention. But by being proactive and honest in these conversations, you can make it a lot easier on yourself. And hey, you might even have fun!