5 Signs You’re Going To Break Your Budget and How To Stop Yourself
Written by
Martin Dasko
Edited by
Rebekah Evans
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According to the Financial Head Start Survey conducted by GOBankingRates, only 9.3% of respondents admitted to following their budgets 100% of the time. If you’re trying to save money and work on your financial goals, you likely already know the importance of following a budget. However, life gets in the way, and one can’t always follow the spending plan they created with the best intentions. The objective should be to adjust your budget to ensure that you always have some sort of conscious spending system so that you know where your money’s going.
These are the five signs that you’ll break your budget soon, along with some advice for turning things around so you can stick to it.
You Don’t Update Your Budget
“A successful budget is rarely a set-it-and-forget-it venture; it should change with you,” said Renée Campbell, director of Youth and Family Banking at JPMorgan Chase & Co.” It’s a good idea to revisit the basics every few months to see how your budget is helping you reach your goals and if it’s still a good fit for your lifestyle.”
Too many people treat their budget as a one-time task. It should be a document that gets updated frequently since your life is constantly changing. You may be breaking your budget often because it’s outdated and irrelevant to your current situation.
“By reviewing your budget regularly, you can catch and adapt to these changes early. Perhaps certain categories are spilling over or you’ve improved your financial flexibility for extra breathing room elsewhere. Noticing changes helps you keep your budget reflective of your priorities,” Campbell added.
Your Values Have Changed
“Your budget should help you spend according to your values,” explained Zach Whelchel, founder of MyBudgetCoach. “When your values shift your budget should, too. This can be in the moment or across seasons.”
It’s possible that your values have changed and you haven’t updated your spending plan to reflect this. There are many reasons why your values can change, but you may simply be in a different life situation than when you first created your budget. When your values or priorities shift, then your spending plan should be altered.
You’re Not Budgeting the Right Way
Whelchel pointed out that more people should use a zero-based budget rather than simple expense tracking. “The main reason for that is that expense tracking apps help you look backward, while zero-based apps help you look forward,” he added.
If you want to ensure that you don’t break your budget, you’ll have to create a plan that sets you up for success. If you’re budgeting the wrong way, then you may not be able to stick to the plan since it doesn’t work for your lifestyle. The good news is that there are various options for budgeting systems and budgeting apps out there for you so you can look around until you find one that makes sense.
You’re Unrealistic About Your Spending
“Learn to be realistic with the categories you pick and the amounts you set for them,” Whelchel said. “Include your non-regular expenses and set aside money for them each month so you are prepared.” Whelchel pointed out that people often pick an overly optimistic number when setting up their budget instead of looking at their actual spending over the last few months. For example, while you may want to limit how much you spend on groceries, you may not always be able to do so.
If you want to get back on track with your budget, you’ll want to categorize your transactions so that you can adjust the numbers. Your spending plan should be realistic since we can’t ignore the realities of inflation and changing prices.
You Haven’t Made the Necessary Changes
If you’ve made significant adjustments to your monthly spending through moving or a new job, you’ll want to ensure that your budget reflects this. Making the necessary changes allows you to stay current with your spending plan.
“Once you’ve created a budget that reflects your expected bills and income, you can automate consistent monthly payments, which can help make managing your budget a breeze,” Campbell explained. You’ll want to stay on top of your budget by confirming that the money allotted for specific expenses still matches.
“It’s also helpful sometimes to make a fresh start with a new budget,” Whelchel added. “This isn’t failing. The best budget is the one you’ll actually use. It’s worth it to keep trying until you find a plan that works for you.”
If you want to stick with a budget, you have to remember that it makes sense to update and adjust your spending plan frequently to reflect your current situation. You don’t want to be stuck with an outdated budget that doesn’t work for you anymore.
Methodology: GOBankingRates surveyed 1,001 Americans aged 18 and older from across the country between Oct. 17 and 22, 2024, asking twelve different questions: 1) What is your main financial goal for 2025?; 2) How do you plan on keeping yourself focused on your financial goal in 2025?; 3) If you’re planning to retire in 2025, what is your main financial concern?; 4) How much debt do you have?; 5) How do you plan on paying down your debt in 2025?; 6) How much time do you expect to spend planning your budget per month in 2025?; 7) Currently, what percentage of time do you stick to your budget?; 8) How much do you have in your emergency fund?; 9) How much do you expect to add to your emergency fund in 2025?; 10) How many months of your expenses do you have saved?; 11) What financial resources are you incorporating into your personal finances in 2025?; and 12) What’s your main financial concern going into 2025? GOBankingRates used PureSpectrum’s platform to conduct the survey.
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