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Why am I bad at budgeting?

If you’ve come to this post, you’re probably someone who wants to budget, but can never quite make it work. Rest assured, you are most certainly not alone.


In fact, throughout college, I never stuck to a budget. It wasn’t for lack of trying–I was in a frequent pattern of becoming stressed about money, then watching a personal finance video and creating a budget as a result. The problem, however, rested in the fact that after creating the budget, I didn’t do anything with it. I simply wasn’t tracking my spending to make sure I was actually following the goals I had set out for myself.


Sometimes, a big expense came up and I thought darn, I guess I’ll just try again next month. And sometimes I just simply forgot to track my spending until the end of the month. Regardless, my many attempts all ended the same–I spent money as I felt I “needed” to, without much planning ahead.



If you find yourself asking “why am I so bad at budgeting?” start asking where in the process you are going wrong. Here are 4 simple steps to budget and where you may be getting tripped up:


1. Know approximately what you spend

If you’re creating a budget blindly, you won’t get very far. I used to think about how much I “should” be spending on nonessential categories like eating out, and because I felt I shouldn’t spend a lot on eating out, I would budget unrealistically small amounts for my lifestyle. Try looking back at your past few months of expenses and averaging the amount spent monthly for each category. It’s not always fun, but it’ll help set you up for success!



2. Create a realistic budget based on what you spend

It’s hard to quit anything cold turkey, especially your spending habits. If you discovered you spend $500 a month on eating out, your gut reaction may be to cut that down to $50. Of course, that’s not to say you can’t, but if you’re just starting with a budget, it’s probably going to be easier to start whittling down slowly (say, $450 or $400). Trying to force yourself to stick to a budget that you can’t realistically follow is only going to discourage you. Ensure that your total going out (what you’re spending) is less than the money coming in (what you’re earning). If you’re spending more than you’re earning, you’ll need to either cut expenses or raise your income.


3. Track your spending regularly

This is the key step I missed for years. In order to follow a budget, you need to track your spending regularly! Try totaling up your expenses twice a week to start. If that seems often, that’s because it is often. By constantly reminding yourself of your spending and your budget, you can build better habits and remind yourself of your goals.



4. “Close out” your budget by comparing what you actually spent to what you aimed to spend

At the end of the month, look at how much over or under you went in each and every category. If there are vast differences, think about how those can be prevented in future–would a sinking fund be helpful? What caused you to go over on shopping? Try to look at trends in your spending to make a more realistic budget for the next month.


Budgeting as a concept isn't that hard. It’s a series of repeated steps–the problem rests in our ability to remember and stick to those steps.


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