We can be our own worst enemies when it comes to money. You might think that “budgets just don’t work” or that you aren’t cut out to manage your own finances. However, it’s more likely that you’ve set yourself up for failure with one or more of these self-sabotaging budget behaviors.
Once you figure out why your attempts to maintain a budget keep failing, you can get to work on fixing those issues. It won’t necessarily be easy, but the rewards are worth the effort. After you get out of your own way, you can start to enjoy greater peace of mind and financial security.
How many of these budget-sabotaging bad habits do you recognize in yourself?
You Set an Unrealistic Budget
When you’re new to budgeting—and especially when you’re starting from a financially precarious place—your first instinct might be to set the “perfect” budget. You’ll save half your paycheck, pay off your debt in record time, and… live off ramen noodles and never leave your house because you forgot to budget for food or entertainment.
Yeah, there’s a problem with this budget. It’s not realistic at all. When you create an overly ambitious budget, you set yourself up to fail. Saving 20% of your paycheck is more achievable than 50%, but regardless, you should prioritize paying off your debts before building up your savings account. Anything that increases your net worth–which covers both saving and paying down debt–can go in that 20% category.
If your budget feels too restrictive, you won’t stick with it. That’s just basic human psychology. You need to allow for a certain amount of “fun money” to make life more enjoyable. If your budget feels like punishment, why would you feel motivated to keep it up?
You Aren’t Shopping Smart
One reason you might find it hard to stick to your budget is that you aren’t spending your money wisely. Let’s say you are feeding a household of two adults and two children. Food is the third-biggest line item on any budget, after housing and transportation. It’s vitally important, and simply slashing your food expenditure isn’t the best way to save money.
Instead, consider whether you’re spending smart. Are you buying name brands when generics are just as good—but much cheaper? Are you wasting a lot of perishable food at home? Do you go to the grocery store without a plan? Are you shopping at the most expensive grocery store in town? Do you ignore sales and coupons?
If you know that your budget is reasonable based on your income, lifestyle, and financial goals, then this might be the reason you can’t stick to it. By shopping smarter, you can stretch your dollars farther without sacrificing your quality of life.
You Don’t Keep Track of Your Money
If you aren’t tracking your spending, then you might as well not set a budget in the first place. How will you know if you’ve maxed out your entertainment budget when you don’t write anything down? You might think that you can reconcile your bank statement against your budget at the end of the month, but that’s not a good way to monitor your spending. You need real-time—or at least daily—feedback to start building better habits.
The easiest and cheapest way to track your money is to write everything down in a notebook or on your phone. Every time you hand over cash, swipe your card, transfer money, or write a check… write it down. Ideally, you should note the date, how much you spent, and where you spent it. If you want to get more granular and make a list of everything you bought and divide it into categories, then go for it—but don’t make this process such a hassle that you give up on it after a few days.
Because we live in an age of wondrous technology, you can download a budget-tracking app that does all of the work for you. Although some of these budgeting apps cost money to use, they often pay for themselves in the long run. Mint is one of the most popular money management apps in the world, and the premium version costs just $4.99 a month. For less than the cost of one Starbucks run, you could take control of your personal finances and finally start sticking to a budget.
Read More: Best Budgeting Apps for Couples
You Have a Scarcity Mindset
There are two types of people in this world: those who view life through the lens of scarcity and those who embrace life’s abundance. Which one are you? Steven Covey, the author of The 7 Habits of Highly Effective People, described these two mindsets and the profound effect they have on our behavior. When you have a scarcity mentality, you believe that resources are always going to be limited. Ironically, this can lead to more reckless spending.
You are much more susceptible to sneaky advertising tactics when you are stuck in scarcity mode. Buy now before it’s gone! Limited time offer, act fast! You also tend to spend money as soon as you get it. This is because your mindset is focused on scarcity. You know that the money will run out, and then you’ll have nothing. So you go out and blow your paycheck as soon as you get it, which creates a self-fulfilling prophecy.
NPR’s social science correspondent Shankar Vendantam explored this phenomenon and found that “[s]carcity produces a kind of tunnel vision, and it explains why, when we’re in a hole, we often lose sight of long-term priorities and dig ourselves even deeper.” Work on addressing your relationship with money. A therapist who specializes in financial topics can help.
You Rationalize Overspending
You were doing so well with your budget until the end of the month. Then you had a bad day at work and decided to do a little retail therapy to pick yourself back up. After all, you’ve been working really hard and deserve to treat yourself to something nice, right? Sure, it tanked your budget this month, but you’ll get back on track next month.
We’ve all rationalized poor decisions like this at some point. As a general rule of thumb, if you have to talk yourself into something, then you probably shouldn’t do it. Going out for celebratory drinks or joining your friends for an activity you can’t actually afford will tank your budget. Sticking to your plan may mean learning to say no—both to the enablers in your life and yourself.
You Haven’t Set the Right Speedbumps
Budget speed bumps work just like the ones in a parking lot. They force you to slow down just enough that you can make better decisions. Your speed bumps will look different than someone else’s, depending on your personal spending habits. If you tend to do a lot of online shopping, for example, then deleting saved payment information from the sites where you spend the most money is a good move. The next time you want to order something, you’ll have to go get your card and manually enter the information. That might make you think twice about placing the order after all.
If you find it easy to overspend when swiping your debit card, then consider trying to old-fashioned envelope method of budgeting. While you should still pay your bills by automatic bank draft to avoid potential late fees, try creating envelopes for each spending category on your budget. You might have envelopes for gas, food, entertainment, pets, and household necessities, for example. Withdraw the cash you’ve budgeted for each category and put it in the corresponding envelope. Paying with cash makes you much more aware of how much you’re spending and how close you are to maxing out that budget category.
You Aren’t Flexible or Forgiving
Nobody is perfect. You will stumble at one point or another as you learn to budget your money. However, when that inevitably happens, how you react will determine whether you’ll succeed in the long term. “All or nothing” thinking is a common type of cognitive distortion where you believe you’re either perfect or a total failure.
When you think this way, any mistake ruins everything. You might as well give up. You’ve already busted your budget, so why does it even matter if you go out and blow the rest of your paycheck right now?
Approaching personal finance with a flexible, forgiving attitude is essential to making your budget work. Sometimes unexpected expenses pop up. And sometimes you can’t resist ordering delivery even though you just bought groceries. Yes, you put a ding in your shiny new budget As long as you pick yourself up and get back on the plan as soon as possible, it’ll all be okay. However, if you use one minor misstep as an excuse to ditch your budget, you’ll never get any closer to your financial goals.
You Don’t Realize How Much You’re Paying for Debt
Carrying consumer debt is expensive. You might not even realize how expensive it is. If you start thinking of interest as a monthly bill, it can help motivate you to pay off those credit cards a lot faster. But if you fail to account for that interest in your budget, you may find that it’s impossible to get ahead without realizing why.
Let’s say that you have a credit card balance of $5000 at an APR of 18% (the average interest rate). Even if you take a relatively aggressive approach and pay off your debt in 18 months, you’ll pay $637 in interest. That’s an extra $35 a month! Your best move might be to consolidate your loan at a lower interest rate. For more about how to tackle debt, check out this post on Mind Your Dollars.
You Aren’t Giving Yourself Enough Time to Change
Making any kind of meaningful habit change takes time. James Clear, the author of Atomic Habits, has found through extensive study on the subject that it takes the average person at least two months to form a new habit. This flies in the face of conventional wisdom, which insists that a new habit should take between 21 and 31 days to become second nature.
If you are struggling to stick to your budget, it could just be that you haven’t given yourself enough time to get used to it. Changing lifelong habits is a long process. When you impose a deadline on that process, you could sabotage your efforts. As Clear writes, “Whether it takes 50 days or 500 days, you have to put in the work either way.”
You Forgot Why Your Budget Is Important
Perhaps the most fundamental way to sabotage your budget… is not having a clear reason to set one in the first place. It’s not enough that budgeting is “a thing you’re supposed to do.” You need a specific, personal reason to stick with your new financial plan.
Everyone’s “why” will be different, so, unfortunately, it’s not possible to give a one-size-fits-all solution to this issue. Before you create a budget, take some time to write down your financial struggles and your goals for the future. If you want to stop living paycheck to paycheck, dig deeper and think about the ways that your life would change if you broke the cycle. Be as specific as possible. “I want to save for retirement” won’t motivate you as powerfully as “I want to retire early and buy a cabin on a lake, where I can enjoy fishing and writing my novel.”
If you’re a visually minded person, find an image or create a collage that represents the reason this budget is important. A budget shouldn’t be a goal in itself, but a tool to help you achieve something meaningful.