4 signs that your budget has gone wrong


Creating a budget is a key part of managing money wisely and getting the most value from your money. Unfortunately, not all budgets really help people achieve their financial goals.

Here are four big signs that the budget you created has gone wrong and it’s time to make some revisions to your spending plan.

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1. You regularly exceed your budget

If you don’t stick to your spending limits, your budget is more of a wish list or an ambitious document. It doesn’t necessarily help you as much as possible to make sure that you are using your money as wisely as possible to achieve your goals.

If you are consistently going over budget, the best thing to do is figure out why. Have you set unrealistic goals? Are you overspending or not tracking your spending enough?

If this is the first case, consider reworking the budget from the ground up. If the latter is the case, you might want to consider an approach such as envelope-based budgeting where you put a certain amount of money for each expense category in an envelope and stop spending as soon as it is. there aren’t any more. For more help, check out our comprehensive guide to budgeting methods.

2. You always feel helpless

A good budget should ideally include at least some cash for the fun purchases that are important to you. If not, you’re naturally less likely to stick with it in the long run, and you might be more prone to splurging that leaves you in credit card debt.

If your budget feels like you never get the most out of your money, consider trying to rework the numbers a bit so that you have the option of buying a few treats here and there.

3. You face a lot of expenses that you have not planned

If you regularly find yourself facing unexpected expenses, chances are your budget is not comprehensive enough and does not take into account routine costs that may arise.

For example, things like Christmas presents and home repairs shouldn’t be surprises because you know they will happen eventually. So you should plan and save for them over time.

If this is your case, go through your credit card statements for the past six months or the past year and make a list of all recurring expenses. Then figure out how much you need to save each month for them so that you can be prepared and they won’t become budget breakers.

4. You are disappointed with how much you are saving

Your budget should help you achieve your goals, including saving money for emergencies and the future.

If you’re disappointed with everything you put aside for your goals despite your budget, then it’s time to get back to the drawing board. Decide how much you want to save (ideally around 20% of your income), then work the rest of the numbers to meet that goal.

For example, if you’re bringing home $ 2,000 a month and want to save $ 200, include $ 200 as a bill to pay along with your rent or mortgage and other essentials. After factoring in your savings and those other crucial bills, divide the remaining amount into different types of discretionary spending you want to make.

These budget fixes should hopefully help you create a good budget that you can live with, that gives you the opportunity to get the most out of your money, and that helps you ensure that you are able to meet your goals. the future.


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