Why budgeting doesnt work

Would you be able to buy a house sooner or contribute more to your retirement plan? Maybe your family could finally take that dream vacation to South America or spend a month driving across the United States in a camper van. Just like a lack of goals can hurt your motivation, failing to build in any rewards also makes it harder to stick to your budget. It sounds counterintuitive since the whole point of a budget is to reduce spending, especially in frivolous categories.

By rewarding yourself for minor victories or achieving small goals on the way to a larger one, you trigger the release of dopamine, the feel-good chemical, in your brain.

Spending half of what you saved in the last two months on one night out with friends is a budget-killer. To reward your successes without completely derailing your budget, make sure the rewards are small, measurable, and disciplined. It can be as simple as taking a long bubble bath while your kids watch a full-length movie or skipping the dishes for a night and getting into bed at 8pm to binge-watch your favorite guilty-pleasure show.

Or splurge on something small, like gourmet coffee beans, which can also save you money by keeping you away from that pricey coffeehouse for a while. Make a list, and when you achieve a small goal, pick something off the list as a reward for your success and to help you maintain your motivation. What do one-click ordering, stored payment information, and subscription boxes all have in common?

They make it very easy for you to spend more money than you intended to. Credit cards encourage consumers to spend more. Add some friction back into your spending. Leave the card at home or in your car so it takes real effort to use it. Also, remove your credit card or bank account number from any website that stores it in your profile.

Anything you can do to make it harder to part with your paycheck can help you stick to your budget. Pro tip : Right after you remove your saved credit card from your browser, add the Capital One Shopping extension. When you do shop online, Capital One Shopping automatically applies available coupon codes to help you save money. Capital One Shopping compensates us when you get the Capital One Shopping extension using the links we provided. As long as you establish how much you need to save each month for retirement, your emergency fund and any other big, future purchases, and you actually set that amount aside, you don't have to budget at all.

That's the money you now live off of," which will go towards fixed costs like rent and food, but also discretionary spending like restaurants and entertainment. Kimmie Greene , money expert at Intuit , offers similar advice. Rather than scrutinizing daily expenses, she encourages people to think: "As long as I can save this much per month or quarter or year, it doesn't really matter how I spend my money. I just have to know that I'm getting to the savings goal that matters for me at this point in my life.

Certified financial planner Nick Holeman agrees. You can make it a little easier on yourself by making a list of your long-term financial goals and reminding yourself of them every time you're tempted to overspend. You could also use a budgeting app to track your spending to help hold yourself accountable. Your budget is supposed to help you figure out how to allocate your money so that you can cover all your expenses without taking on debt, but if your expenses exceed your income, there's really no way to avoid debt.

You must either decrease your expenses or increase your income until you find a balance. It's easier to cut expenses. Look through your budget for places you could cut back, like dining out less or canceling subscriptions. Trim them back until your monthly outgoings are less than the amount you have coming in.

If you decide to go the other route, you could try starting a side hustle or working overtime. But be aware that these strategies might not generate as much additional income as you'd banked on, especially if you can't work as much as you'd hoped each month. Finding additional sources of income may help you balance your budget, but it's not always practical. Whether it's retirement, buying a home, buying a new car, or taking a trip somewhere, you probably have some long-term financial goals.

You likely can't pay for any of those things with the extra cash left over from a single paycheck, so you'll have to save for them a little at a time. Your basic living expenses should be the first things you include in your budget, followed by your savings goals, and finally discretionary spending.

If you place discretionary spending before your savings plans, you risk overspending on discretionary items and not saving anything for your goals, or at least extending how long it takes to reach those goals.

At the same time, you do have to allow for some discretionary spending in your budget. If you don't ever allow yourself to have any fun, you'll probably grow sick of your budget faster and be more inclined to start breaking its rules. Play around with a few scenarios to decide which is best for you. A month or two into your budget, you might realize you left out a few things. That doesn't mean your budget is ruined, but you will have to adjust it to include these new expenses.

Irregular expenses -- those that come up once a year or every few months -- are easy to forget and more difficult to budget for. A good strategy is to divide each of these expenses by the number of months you have to save for them and set that much aside each month so you'll have enough when the time comes.

Reduce your risk of forgetting expenses by combing back through your bank and credit card statements for the last year, if you have them available, and look for any expenses you may have forgotten to include when you first created your budget. Budgets that are too granular can backfire on you. It makes sense to keep track of how much money you spend on groceries every month, but you don't need to make note of what you bought each time and how much each item costs.

This just becomes too time-consuming and it might make you more inclined to neglect your budget over time. You have to walk the line of having a budget that's detailed enough to be useful but not so detailed that you don't want to go through all the work it takes to maintain it. With this type of budget, you create envelopes for each budget category you have. A set dollar amount is assigned to each envelope. This method involves assigning money to bills, savings, debt and other expenses each pay period.

Perhaps you seek the implied control—and also freedom—that a weekly allowance offers to children. Using this method as an adult, you would give yourself a finite amount of money for discretionary spending each week. The great thing about having different budgeting methods to choose from is that you can experiment to find one that fits your lifestyle and financial situation.

Or you may prefer the cash envelope method if you want to take a break from spending with your debit or credit cards. As you work toward bringing your lifestyle and budget in harmony, consider what personal finance tools you can use to smooth the path.

For example, you may want to use a budgeting app to track your spending and income automatically. This saves you the trouble of crunching the numbers, which means you can take your budget with you anywhere you go.

Debt repayment apps can help you stay on track with paying off student loans , credit cards or other debts. And some personal finance apps allow you to manage budgeting, saving, debt and investing all in one place to simplify things even further. Using banking and personal finance apps can take some of the stress out of managing your money each month.

The more you can simplify the thought process that goes into creating a budget, the easier it may be to follow through on the plan. Your budget, just like your life, can change and evolve. There may be new expenses to account for if you get married, start a family, buy a home or achieve any other major milestones. And there may be some expenses that go away as you pay off student loans or become more intuitive about cutting out unnecessary costs.

Scheduling a monthly budget check-in—perhaps in the form of a budget date night with your spouse—can help you stay in touch with your spending and income. During your check-in, you can review:. The more you do this, the more comfortable you may feel with the idea of budgeting.

I'm a freelance financial journalist and a regular contributor to U. News and CreditCards. You can find me on LinkedIn or follow me on Twitter seemomwrite.