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We all face many budget challenges, it’s how you deal with them that will be the difference between success and failure.
You decided you need to budget your money…
Smart move!
Living on a budget is really the only way to take control of your financial future.
Maybe you’ve tried to budget your money before and gave up a few weeks later?
Well, guess what? You are not alone…
In fact, 2 out of 3 Americans don’t stick to a budget which is probably why over 79% are in debt.
One of the biggest budget challenges we all face is actually sticking to it!
But why?
Well, what we typically do is create a budget on paper. It’s the ideal budget…
We cut out all unnecessary expenses. Check ✔
We have all our monthly expenses covered. Check ✔
We have enough income to cover those expenses. Check ✔
Awesome! We are good to go…
Then when we go off-budget in a week or so, we wonder “what we went wrong?”
Unexpected expense trip you up?
Partner just won’t cooperate?
Tired of not having any fun?
Rest assured… anyone who has tried to manage their money better has run into these budget challenges…
It’s what you do about it that’ll mean the difference between success to failure.
If you are ready to stop spinning your wheels trying to stick to a budget then let’s dive in and nip these budget challenges in the bud…
9 Budget Challenges & How To Overcome Them
Budget Challenge #1 – You Have Unrealistic Expectations
It happens to everyone…
You get hyped up…determined to fix your financial situation so you create a budget because well, that what everyone tells you to do.
It looks awesome on paper… all your bills are taken care of, you cut your expenses to the bare minimum, you’ll even have money to spare at the end of the month…
Then reality kicks in when you can’t even stick to it for a few weeks.
Don’t feel like a failure, this is a totally normal budget challenge that everybody goes through.
The reason behind it is because you expect too much from yourself too fast.
Yes, you create this great budget because you want to do better but then end up setting expectations of yourself that just aren’t realistic.
You don’t allow any leeway to have any fun…
How likely are you to never go out for a nice dinner again, or never spend any money on something just for you?
Not very I’m guessing…
Listen, it great that you want to do really good and get your money situation under control. But if it’s not realistic, then you are setting yourself up for failure right from the start.
Instead, be real with yourself. You know what you can easily give up and what will be a challenge. Work with it…
If you know that going out to dinner is a soft spot, then budget for it.
If you like pampering yourself once in a while, budget for it.
Just set a limit to how much you spend on these things, and stick to it.
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Budget Challenge #2 – Your Partner/Family Won’t Cooperate
Living on a budget is hard enough when you’re first getting used to it, but when you have a partner who is uncooperative it can be a real challenge.
And if you have children are constantly wanting more… well, it could feel like you are fighting a losing battle.
You are trying to do something that will benefit everyone involved but they just don’t see it that way.
The only way to deal with this budget challenge is to talk it out…
You need to explain to everyone involved that what you are trying to do is to make their (and your) life better by getting the family finances whipped into shape.
Your partner or spouse needs to be just as involved as you are in trying to take control of the finances, you need to work for a common goal…
A goal that you both of you want to achieve…
If you don’t know what that is, it’s time to have a serious talk with your partner about your finances and what you both want out of life. Working toward a common goal together is much easier than going at it alone.
Of course, you know that your children really don’t have a say in how you spend your money. You are going to do as you see fit to make sure that they have their needs met.
But that doesn’t mean that living on a budget won’t be easier if they cooperate.
They don’t need to know any of the details of your finances so keep that between you and your partner. Instead, highlight what they will gain by helping out.
Budget Challenge #3 – Unexpected Expenses Keep Tripping You Up
Your tire blows out driving home from work…
The family dog gets sick…
Your water heater dies…
How can you stick to a budget when all these unexpected expenses keep throwing you for a loop?
First of all, these things are the exact reasons why you need an emergency fund.
Without an emergency fund, it’s going to be impossible to stick to a budget because these things happen all the time.
If you don’t have one yet, don’t worry, here is what you need to do.
1) Find money in your budget to start contributing to an emergency fund.
You may need to make some cuts to make it happen.
Go through each item on your budget and see if there are ways you can reduce the amount you are spending.
Are there cheaper alternatives to some items? Or are there any things that you simply can do without?
Can you bundle services like insurance policies to get a discount or bundle cable internet and phone at a lower price?
Even if you can’t free up a bunch of money, every little bit will help.
2) Keep your emergency fund in a safe place and working for you.
You know that you shouldn’t dip into your emergency fund when you are low on cash, right?
To avoid doing this, keep your money in a bank other than the one you do regular business with. This will make it more inconvenient to dip into on a whim.
Don’t get a debit card for this account for the same reason as above, it’s just to easy to spend the money.
Lastly, find a bank that offers a high-interest rate to make your money work for you.
If you are going to keep your money in the bank, it just makes more sense to earn the most interest as you can from it. Seriously, it’s FREE Money!!
I keep my emergency fund in a Savings Builder Account through CIT Bank simply because they pay me a great rate for doing so.
At the time of this writing, I’m earning 2.20% interest on my money compared to the measly 0.25% my local bank offers.
Cit Bank is currently the best option and my recommendation for your emergency savings.
- Currently, they pay the highest APY through their savings builder account.
- Have no opening or maintenance fees.
- Compound interest daily to maximize your earning potential.
- Only require a $100 minimum deposit to open an account.
3) Brainstorm ways to build up your emergency savings fast by.
Just because you can’t contribute a bunch of money to your emergency fund every month, doesn’t mean you can’t build it up fast.
Selling stuff that you don’t need or want anymore is a quick way to fund your savings. Go through your closets, basement, and garage, even your kid’s toy chest, and look for things that can be sold.
The quickest and easiest way to get rid of everything is to have a garage or yard sale. You can literally fund your savings in just one weekend.
Whatever doesn’t sell can be listed online through Facebook Market Place, eBay, Amazon, and other sites.
You can find a list of sites to sell through in this article.
Another way to save money for your emergency savings quickly is to make money with a side hustle.
There are many things you can do in your spare time to earn a bit of extra money, I have a list of over 30 ways you can make money from home in this post.
Budget Challenge #4 – You Don’t Have Any Goals For Budget
Why are you trying to budget your money? Does this sound like a trick question?
It’s not… I’m serious.
Are you budging because that’s what everyone tells you to do, so that’s what you are doing?
Welp, there is a good reason everyone says to budget your money. But if you don’t have a goal for your budget, then why are you putting yourself through this?
The reason you need to budget your money is so that you can reach other financial goals that you set for yourself.
It could be that you are trying to get out of debt…
Maybe you ‘d like to retire comfortably someday…
How about gaining financial freedom so you have the option to quit your soul-sucking job one day to do something that you are passionate about?
Whatever it is that you’d like to accomplish someday, then that is the reason you need to budget.
Figure out what you really want out of life and use your budget to make that happen.
Sticking to it will be so much easier if you actually have something to work toward and look forward to reaching.
Budget Challenge #5 – Life Keeps Tripping You Up
You have everything planned out. Your budget looks awesome. You even have money to spare at the end of the month.
You are in total control…
Then your BFF calls, tells you that your favorite band is coming to put on a concert in your area.
“We have to go!!” she says…” We’ve been waiting so long for this!”
It’s not in the budget, but you are dying to take a break and get away from it all.
Besides, your friend would take it personally if you said no.
Well, maybe not this exact scenario, but I think you get the point…
Sometimes life gets in the way when you have the best intentions to live on a budget.
It’s how you handle this budgeting problem that will make or break your budget.
Of course, you do have the option to say no, but let’s get real, you have to go… you are going…
Now you have to figure out how to pay for this expense without going over budget.
You can either find a way to earn the extra funds or cut back on some expenses to make it happen.
Maybe you work a few extra hours of overtime at work or find a way to make money with a side hustle.
You can use all of your fun money you set aside for the entire month, which means this one night is it…
Or you can look for ways to reduce some flexible expenses in your budget (your grocery budget is one of the easiest expenses to reduce).
Whatever you do, just don’t give up on your budget. You are going to have to deal with these types of situations all the time…
You need to have a backup plan for when they do happen.
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Budget Challenge #6 – You Don’t Want to Give Up Having Fun
You’ve been avoiding creating a budget because you think that it means no more fun for you.
Let me tell you that this is not the case…at all…
You can still have fun, you just need to make sure you can afford to have fun without using credit cards and getting into debt.
In fact, if you live on a budget, you’ll be able to do even more things you enjoy.
You can plan on saving for that vacation that you’ve always wanted to go on…
You will be able to save up for a down payment on your dream home…
You’ll have the ability to quit your soul-sucking job to take a job doing something that actually makes you feel good…maybe even start a business so you can work from home.
The sky is the limit…set your budgeting goals and follow through and you’ll get there!
Budget Challenge #7 – You’re Unorganized
Not being organized can be one of the biggest budget challenges, but even more so when you first start out.
Until you’re used to living on a budget, you’re going to have to stay on top of it. But the good news is that there are tons of tools out there to help you organize your budget and finances
Some apps like Personal Capital can do most of the tracking for you if you link your debit/credit cards. It even categorizes the charges for you.
Of course, it’s not perfect so there is still some minor maintenance. For instance, if you buy snacks at a gas station, the app may categorize the charge as a transportation/fuel expense instead of grocery expense just because of where you make the purchase.
If you prefer pen and paper, use a budget planner to maintain your budget. If you are pretty good at creating spreadsheets, then create a budget spreadsheet.
Just find a way to make it easier to stay organized based on your personality and work with it.
Budget Challenge #8 – You Can’t Balance Your Budget
In order to balance your budget, you need enough income coming into your household to cover all your expenses.
If you can’t make ends meet, you really only have two options, either cut out all expenses that aren’t necessities or earn more money.
If push comes to shove, you may need to make some hard choices. This could involve moving to a smaller house or possibly even moving back to your parent’s home.
You may need to take on a second job or work more hours at your current one.
These are not options that anyone wants to do but, if you have to, you have to…
If you don’t, you are going to get into debt or into more of it which will just compound this budget problem.
Tough love, I know. But those are your only options at this point.
Budget Challenge #9 – Budgeting Too Time-Consuming
Budgeting can be time-consuming, but it really doesn’t need to be. You can do many things to help automate your budget.
Setting up auto-pay on your bills and having your paychecks deposited directly into your accounts can save a ton of time every month with a one time set up
You can make sure you account for every expense so you don’t need to rework your budget every month.
Using multiple accounts to track your spending in each category or use the cash envelope system are a few other ways that save time.
In fact, if done right, you can automate your budget so it only takes you 15 minutes a month to maintain.
This is something I teach in my “Simple Budget Automation Blueprint” course. Sign up here to get notified the next time the doors to the course open.
When trying to get in control of your money, you will face many budget challenges along the way. You need to find a way to work your way through them if you want to reach financial freedom someday.
What are your biggest budget challenges and how are you working on overcoming them? Leave a comment and share your tips with the rest of us.
Budget Challenges FAQ
What are the problems when it comes to budgeting?
There are many budget challenges that everyone faces, unexpected expenses, organization issues, and the time it takes are some of the most common.
What is a zero based budget?
The goal of a zero-based budget is to make income minus the outgoing cash flow equal zero. If you cover all your expenses during the month and have money left over, you must allocate the money to something such as a savings.
What is the 50/30/20 budget rule?
The 50/30/20 budget rule is a way to allocate your expenses based on percentages. Spending percentages are as follows 50% on needs and 30% on wants while allocating 20% to savings.
Related articles to help budget your money better
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10 Reasons you have no money & how to fix it
Cash envelope system explained: why use it and how to get started
How to plan for unexpected expenses to avoid budgeting your budget
Managing money like a pro – 21 money management skills we all need to master
How to stop spending money – 14 tips to stop overspending for good
Emergency savings 101 – Everything you need to know to avoid financial disaster
How to budget money the right way
15 Free budget planner templates
How to stop living paycheck to paycheck
Living below your means: Everything you need to know to get started
One simple reason you can’t stick to your budget
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