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The Real Reason Your Budget Isn’t Working

I was recently reading a book on time management and the author said that most people struggle with time management because of two reasons: you are doing too many things and/or you are doing the wrong things.

While this is great time management advice, I also believe it can also be fantastic money management advice. Because the real reason your budget might not be working is because of these two things as well…

1. You Are Doing Too Many Things

Part of your budget problem might be plain and simple: you’re doing too much. This could manifest itself in different ways:

  • Maybe you are spreading yourself too thin so you don’t have time to invest in money-saving activities?
  • Perhaps you have too much on your plate so you don’t have energy to make dinner at home — which means you are spending too much eating out?
  • Or you might be running around like a chicken with your head cut off and you end up forgetting to thaw that dinner you made ahead of time or didn’t have time to plan a menu or don’t have time to pay attention to sales at the store?
  • What about all those activities you are doing? Are they costing you money you don’t have right now?

Questions to Ask Yourself

Step back and really examine your calendar, your lifestyle, and your commitments. Are you fulfilled, calm, and happy with where you are at right now? Do you have breathing room in your day? Do you feel like you have a good balance of your priorities?

If you answered no to any of these questions, it’s time to take a good, hard look at your life and see what you can cut.

Start with unnecessary expenses: Can you cut anything here? Maybe that gym membership you’re not really using, that magazine subscription you’re not really reading, that subscription box service that you don’t absolutely adore, or that membership for that online subscription site that you don’t really use?

Really go line-by-line in your budget and ask yourself, “Is this a necessity? Is this sparking joy in my life?”

Next, look at your calendar commitments: Are you signed up for regular meetings or studies or clubs or lessons that aren’t adding a lot of value to your life? Is there anything on your schedule that you dread but you keep doing it because you’re scared to say no to it? Are your kids involved in too many extra-curricular things that are just sucking your family’s time and breathing room but aren’t things your kids are absolutely loving?

Really go commitment-by-commitment on your calendar and ask yourself: “Is this a necessity? Is this sparking joy in my life?”

2. You Are Doing the Wrong Things

Maybe you aren’t doing too many things, but instead it’s another simple problem: you are doing the wrong things. You are really working hard and investing your time and energy and focused intensity, but it’s on the wrong things. So you’re not getting anywhere and feel like you’re constantly struggling and behind financially.

Maybe you are putting your effort into the wrong places. For instance, instead of spending an hour doing something that could bring in $25 to $50 (such as: listing items on Craigslist or eBay or coaching or working as a virtual assistant), you are working really hard during that hour to do something that will only save you $2.50 (such as: making your own homemade tortillas).

  • Are you clipping coupons for things you don’t need and won’t use?
  • Maybe you are spending lots of time talking about what you want to do but you’re never sitting down and actually setting some goals and jumping out and starting?
  • Perhaps you are spending time reading frugal blogs and collecting great information on money-saving techniques, but you’re never implementing anything?
  • Are you wasting time researching deals for items you don’t have in your budget in the first place?
  • Or maybe you’re spending hours fantasizing about a bigger home or a bigger paycheck instead of counting your blessings and making the most of where you are?

Questions to Ask Yourself

If your time is limited, you are going to have to pick and choose only those things that will give you the biggest return on your investment. What are those items that give you the biggest return on your investment of time? What do you consider a good return on your investment of time?

How much is your time worth? For me, when I set a dollar amount on my time, it really helped me to be much wiser in how I spent my time.

For instance, a few years ago, I decided that if something was not saving me $20 per hour, it was not worth my time. Why? Well, because there are SO many different options when it comes to what I could invest my time in that would save our family money and there’s only one of me. So I had to pick and choose. Setting a dollar amount really helped me to weed out things that just aren’t worth my time in this season of life.

What are the things that are giving you the biggest bang for your buck right now? Early on in our marriage, this was making do as much as possible and keeping our grocery budget as low as possible. The less we had to buy, the more we saved. The less we spent on groceries, the more we were able to have available for our rent and electric bill and other necessities.

At this season of my life, spending more time working and writing and producing products and less time trying to pinch every single penny is the better return on my investment of time. I’ve had to give up some of my ultra-frugal practices in order to free up time for this and I’ve had to be okay out-sourcing some tasks in my life in order to free up more time.

By determining how much your time is worth and what is giving you the biggest bang for your buck, you’re better able to make sure that you are focusing your limited time and energy on the best things instead of wasting it on things that are going to give you little return.

If someone told you that their budget wasn’t working, what advice or ideas would you give them? I’d love to hear!

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  • Aimee Hadden says:

    Great advice! I find my biggest struggle is trying to do too much. Too often I’m trying to be super woman.

  • Beth says:

    Important post! Gets to the heart of the thought process. I once had a professor talk about people clipping coupons but not taking the time/money to meet with anyone about their retirement planning and leaving their financial future to the person with a junior college degree working in the HR department. His words were a little harsh, but his point was exactly yours: to get ahead you have to do the right things. Sometimes, it means learning new information or seeking out new professional input so that you can work smarter not harder.

  • Sandy says:

    Several points describe my life to a tee, but the one that resonates with me is that I need to be grateful, truly grateful for what I have, instead of overlooking the gifts and dream of what I would like it to be. Thanks for the reminder!

  • Abby H. says:

    I am so grateful for this post. It hit me hard and I am glad it did…it spoke to me, especially the point of learning techniques and not implementing them. It’s time for me to do..instead of sitting…thank you for the encouraging words.

  • Mary says:

    In my experience, budgets work when people base spending decisions on how much is available in that category – not what’s actually in their checking account.

    To do that, they need a tool that puts their money into categories before they spend it, not after. Something like You Need A Budget or Mvelopes.

    A tool like that will show you what categories need your attention. Once you put enough money into the mortgage or rent category, the car category, etc. you see what’s left and that’s where your opportunity is.

    • Ruth says:

      I totally agree with that!

      We use a budgeting app (EveryDollar) and if the app says we’re running low, then we’re extra careful, even if there’s $1,000 sitting in our checking account.

  • Lindsey says:

    Thank you for your advice! We try to stick to a pretty tight budget since I’m a new stay at home mom. This month has thrown us a curve ball with several different illnesses and some dental stuff. Thankfully we do have an emergency fund (but I still don’t want to spend from it).
    We’ll just re-evaluate for March and get back on track!

    • Lisa says:

      Hi, Lindsey! I just want to say I was in your season of life a few years ago. I, too, didn’t want to spend any money in our emergency fund. I was constantly stressing about money even though we had a good savings. What I finally did was create “sinking funds” (I think that’s what financial people call it.) Anyway, I categorized my savings each month just like I categorized our budget. Then I knew I had X amount of dollars for medical, car repairs, etc. The total amount might be $1500 but that $1500 was divided into categories. I estimated amounts for each area based on previous spending over about 6 months times. Then I would allocate each month’s savings based on where I felt each category needed to be. This helped me feel confident in being able to meet our needs for those expenses that weren’t monthly. I just wanted to offer this suggestion because once I did this, I felt so much happier in my role as stay at home mom. All the best!

  • Ruth says:

    We never were successful at sticking to a budget until we discovered the EveryDollar app and discovered making a new budget for each new month. There never is a perfect month that fits into a cookie cutter! Each month has to be re-evaluated! As we use money from various categories, it is promptly recorded in the appropriate category and it tells us how much money we have left in that category.

    Now, we both sit down before the new month begins and agree on what the next month’s budget will be. We also have sinking fund accounts and will be making more for other categories as well. It’s such a relief not to have to wonder how to pay those irregular bills anymore!

    I had *thought* that we weren’t particularly big spenders before, but writing everything down is pretty eye opening. We’ve drastically improved since getting on a budget. I always seem to be finding more ways to be frugal. We also have worked on ways to increase our income since starting to budget.

    I highly, highly recommend using the EveryDollar app and setting up a written budget BEFORE each month begins. It’s really changed our lives!

  • Bessie says:

    I’m a stay at home Mom to five children. I can’t increase my husband’s income, and expenses only grow so, we are on a pretty tight budget. That budget includes putting $500 into savings every month. Yes, that sounds lovely, but it always gets used for unexpected car repairs, replacing the microwave (seem to be built to be disposable these days) or fixing something (leaky roof, siding that blew off in a high wind etc). Anyone that is a parent knows you cannot prevent a child from outgrowing their clothes, nor prevent their appetite from increasing with age. So these are our money savers we do currently, I’m well aware some of you will find these ideas hard to swallow but everyone has different priorities, and I understand that.

    We don’t smoke, don’t have pets, rarely drink alcohol, keep eating out to a minimum, make my own bread (saves $20 – $40 per month) never pay to get our hair cut and never have, don’t wear makeup, my husband and I have a zero dollar clothing budget, (of course we sometimes have to use money from another category to keep us covered!!). I cook nearly every supper meal from scratch, a type of potato, healthy meat and one or two veg. My hubby walks to work every day, even at -30C he’s only had a ride to work before 6 a.m. twice this winter. We sold our old truck because it was costing more than it was worth to keep it running, so we now have only one vehicle and I’m the taxi driver for everyone. I’m afraid we only wash the car when it’s filthy (the water is so hard around here that if you use a pressure washer, it dries off with calcium deposits all over). We rarely call out a repair man, the last two visits by the oven repair man cost about $650 and $240. So now I just live with the inconvenience of the oven suffering from brain damage, lol.

    A few weeks back, our 11 year old washer was making horrendous noises, and it also kept letting off distress signals during the cycle, quite unnecessarily. We couldn’t afford a new washer or a man to come and look at it, so poor DH spent hours stripping it down to just a shell, ordered some parts, and put the thing back together while watching an instructional video to show him how to do it. Adding up all the time it took, he probably spent around 10hrs on it.

    Then there are just the plain obvious things that many people do such as: turning off lights in empty rooms, only running the shower for rinsing not while soaping, hanging up some of the laundry instead of paying for the dryer to dry it, only running the dishwasher when it’s really full, only using the washer when there’s a good sized load to put in etc.

    Oh, in case you’re wondering what our $500 savings deposit will be used for, well, it’ll pay last week’s oil change (long overdue) and this week’s repair (something underneath the car rattles loudly and sounds very loose). Oh well, I take a bit of comfort from an aged friend, who had an extremely frugal but kindhearted wife, he once said that they never saved any money until all their children had finished school.

  • K Ann Guinn says:

    I love these points! (Or rather, I really agree with them; they are not always easy to implement.) It takes time and discipline to face these questions, and ideally if we’re married we need our spouse to also be on board, but in the end, it will be worth it.

    The only point I would add (and it touches on both of yours), is to do the next right thing for your season in life. Not only do we have different strengths, personalities and circumstances, but they will also change as we are in different seasons of life. What was important or necessary at one point may not be the most important priority at another point in time.

    Thanks for your insights!

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