6 reasons why you’re budgeting and still failing

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Budgeting is important, but making a budget that is in sync with your financial profile, habits and needs, is even more important. A lot of people make budgets but often fail to avail its benefits. There could be several reasons as to why one fails to reach a set target or goal despite creating a budget. It is seen more often than not, a lot of people fail to take note of the little mistakes they may make while budgeting which eventually leads to them not being able to stick to the plan.

Here are 6 reasons why you’re budgeting and still failing:

1. Not making a realistic Budget

Having the right intent is good but having a practical intent is equally important. Wanting to be disciplined with your money should always start with taking into account your reality first. For instance, if you earn a monthly salary of INR 1 lac, you cannot save INR 80,000 each month! Therefore, for your budget to work you need to take into account not just your income but also your fixed and variable expenses. Not only that, make room for ad hoc spending too. Have a realistic budget where apart from savings, you have adequate overheads for spendings as well. A good budget is, after all, about balance.

2. Not accounting for all your expenses

This happens particularly when you are not aware of all your expenses. True, it is not possible to know the exact amount for each expenditure but it’s important to have a tentative idea. Also, don’t forget to account for those seemingly minuscule expenses that tend to go unnoticed. Sometimes, it is these little spends here and there that can derail a good budget. So, remember to account for all your expenses big and small.

3. Not maintaining an emergency fund

We all agree on the importance of an emergency fund when in need but not all of us act towards creating one when we should. Not having an emergency fund hampers your budget when faced with an unforeseen expense situation. This could lead you to dig into your investments or saving or worse still lead you into debt. To maintain your money discipline and also keep your peace of mind, create an emergency fund, however small it may be. This will come to your rescue when you overshoot your expenses in dire situations.

 4. Not customizing your budget to your needs

There are some brilliant ways people budget their finances and have been known to achieve varied financial goals. While it is good to embrace these best practices, it is far more crucial that you customize your budget specifically to your needs and lifestyle. This is another major reason why some budgets fail; we try to adopt a successful budget without evaluating its impact on our financial profile. To ensure you have a foolproof budget, you should tailor-make it to match your needs. 

5. Not setting the right goals

A budget that has a practical financial goal is a budget that will work for you. Setting yourself up for unattainable targets will not only keep you from reaching your goals, but it will also deter your motivation. Keep in mind that you still need to take care of yourself and meet your present needs while you make a plan for the future. So, account for these and set yourself up for achievable targets. 

6. Not rewarding yourself for your effort

 And finally, anyone who puts in the effort and discipline needs to be rewarded. It is as important as creating and adhering to a budget. Not taking the time or money for well-deserved self-indulgence can leave you feeling unexcited or demotivated about your goals. While you build good habits, you also need to make sure you enjoy the process of budgeting and not miss out on giving yourself a little something once in a while. Have a provision in your budget for this as well. This way you won’t feel left out nor will you go on a guilt-trip for spending on yourself.


These are some simple tips you can follow next time you create a budget. But remember to customize it to your profile and your needs. With a practical approach and a realistic goal, it won’t be long before you start enjoying this process of budgeting if you don’t forget to reward your efforts.

Source: Financial Express
Dated: October 12, 2020

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