Budgeting is depressing to a lot of people, so don’t feel alone! Many people who budget simply misunderstand the goal of budgeting. Hint: budgeting can only help!
A lot of people thinks that budgeting is scary to start, that’s why they often avoid doing it. However, the hardest part of budgeting is not the part where you list your expenses, income, debt, and compute all the numbers.
The hardest part is actually sticking to your budget and make sacrifices along the way that show financial discipline.
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Overall, it’s not a fun walk in the park. It can be really demotivating and depressing – especially if you have something that you want to buy or owe debts. There are even times when you ask yourself why you have to plan every month and save money that far in the future.
Here are the 10 most common causes of “budgeting depression” and ways to deal with it.
When Budgeting Gets Depressing…
1. When There’s Debt
Debt is one of the most common causes of financial stress. A huge amount of debt can put even the most seasoned budgeter in a pinch, especially if the deadline isn’t lenient.
The best way to light a fire of determination when your debt seems like it is sucking all of your money is to know that with every payment you make is a step toward debt-free living. Cut out expenses, and instead of acquiring new assets, get focused on repaying your debt.
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2. Ballooning Expenses
Expenses tend to change in every six months or more. It really depends on the state of the economy and other factors if your life. Most of the time, the changes in the expenses are increases, things always get more expensive, they never really decrease. One way to fight depressing thoughts over ballooning expenses is to determine a way to cut down your expenses. This doesn’t sound cheery, but by evaluating your lifestyle, you can discover areas where you actually spend too much money. You can make adjustments to your expenses and put ease to your aching budget.
3. Insufficient Income
Insufficient income makes budgeting a little harder because you make more sacrifices to make ends meet. It’s pretty hard to save if you’re barely making enough money to save!
Sacrifices such as reducing fruit consumption or avoiding your favorite hobby could be depressing. In the end, it’s probably not worth it if it’s only costing you $10 or $20 a month.
One way to combat a low income is to simply improve your skillset. Allow yourself to find other income streams that can lessen the overall expenses of your budget.
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4. Unrealistic Budgets
There is a chance that your budgeting problems come with the budget itself. Do you have an unrealistic budget? Budgets that are too strict becomes counterproductive, especially if you just started making a budget of your own.
Set your goals toward a bite-size goal until you find your own rhythm. Budgeting can become an easy activity if you play your weaknesses and strengths properly.
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5. Sudden Emergency
A sudden emergency can easily break your savings and the rhythm of your budgeting. Sudden accidents not only suck up your savings but will also prevent you from making income. Before this could happen, you should have an emergency fund ready so you won’t have to make a debt just to pay for your unexpected hospital bill as well as your monthly expenses.
Before repaying your debt or saving money, focus on building an emergency fund that can soak up at least three months of your expenses.
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Demotivation is one of the biggest challenges in sticking to a budget. It is natural to be demotivated because there are things that can affect your saving and spending decisions.
If you started to feel demotivated, ask for like-minded folks for reminders of what you’re actually trying to do. Are you saving for your wedding? Do you want to buy your own house? Always set your sight into your financial goal and work hard to achieve it!
7. The Plan’s Not Working
You follow your plan faithfully and sticks to it even in the direst situations. However, you can’t still achieve the outcome that you expect for your plan. If there’s something that is quite not right in the outcome of your budgeting, take a look at your budget plan and determine what’s wrong with it. You can make someone else take a look to point out if there’s something wrong about your calculations.
8. Wants vs Needs
If demotivation is one of the big rocks that can be thrown at you when doing your budgeting, this one is the biggest that you can receive. Straying away from your budget could be very tempting, especially if there is an unnecessary but very satisfying purchase that tries to lure you into spending.
Developing responses to spending urges is a way to answer this problem. One way to do so is by holding the product in your hand and asking yourself if you really need it. It can help you wake up your logical side and remind you of your financial goal.
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9. Budgeting Burnout
Just like in any activity, a burnout is possible. You’ll just get tired of budgeting, and that fatigue will want you to give up your plans. One way to prevent budgeting burnout is to prepare for it. Set rewards for every achievement that you make regarding your financial goals. Stop budgeting for a month and get back to it with a refreshed state of mind.
It might be easy starting a budget but it’s not easy sticking with one. Or maybe no matter how much effort is put in, something keeps coming up that’s out of our control It’s so easy to be over budget and under-motivated at first. Feeling defeated, frustrated and hopeless – the budget has completely failed to return any sense of control. There’s not enough benefit for it to be worth all the negativity it has caused. So the budgeting sheet is put away and never to be looked at again…
If this sounds like you or anyone you know, then that’s the wrong idea about budgeting!
I’m not here to sell anyone a budget. There are plenty of people who don’t budget and do perfectly fine for themselves.
- Budgeting is not about forcing you to give up things that are important to you.
- Budgeting is not about imposing arbitrary limits on yourself and feeling bad about not meeting them.
The real purpose of a budget is to understand what you are spending your money on and making sure that it’s what you really want to spend your money on.
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How We Deal With Budgeting
When my wife and I moved in together, we went a good 6 months without a budget. No hell broke loose but when I brought up the possibility of doing one, my wife (and she will deny this to death) shot back:
“Don’t ever use the B word on me Hippo!!! I’ll never use a budget I’m not even doing anything wrong AND-”
“Because [we live in] Belltown and I’m young!”
Basically, budgets aren’t sexy.
My wife can blindly squirrel away 5-figures without effort and she’s responsible even without a budget. But she hates paperwork (and still does) and the idea of the “B-word.”
She thought budgeting was a form of punishment. Budgeting was an instant reiteration of what she might do wrong. My goal for the budget was just to give us a better idea of where our money was coming/going and what we wanted to save for!
I ratted her out because she’s the perfect example of why budgets get such a bad wrap among those who actively avoid budgeting. So there, I ratted out the wife.
This is the single most important part of budgeting. Just record and categorize each expense. You do not need to set a budget yet.
You can either do this on your own in our free spreadsheet download or use a service like as Mint or Tiller to help pull together your transactions. When you see where your money is going, you may want to make some changes.
Step 1: Set an Initial Budget Based on Income and Expenses
Unless you’re currently spending more money than you make, it’s okay to set your budget to be however much you’re spending on average. In fact, a budget is simply an estimate of your earnings and expenses, so it should be set based on how much you’re spending. I’d recommend not trying to set aggressive goals for reducing spending from the start; trying to cut too much at once makes giving up entirely more likely.
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Step 2: Think about Long-term Goals
* build an emergency fund
* pay off debt
* put money towards retirement
* travel the world
* buy an emu farm and sell emu eggs
There’s not really a wrong answer (…except maybe the last one) because we’re talking about personal goals, not anyone else’s.
Also, yes the emu example was so I could have the pleasure of giving you that gif. Budgeting is depressing, right? Let Homer getting beat up by an emu cheer you up! Think of this GIF and my message when your budget is making you feel crummy 🙂
Step 3: Make Adjustments to Your Budget
Look at your spending: is it in line with your goals? Are there things you’re spending money on that aren’t as important to you as the others. Can you cut spending on them to put more money towards your needs or wants? If you think you can, choose one category to try for a month and set a goal of spending less.
Step 4: Accept Who You Are
You are going to go over budget at some point, especially at first; it happens to everyone. Sometimes you have unexpected expenses that must be paid for, sometimes you just find you’re trying to give up something important to you and it’s too difficult.
The important thing is that you don’t beat yourself up over it.
Wifey does it all the time. If we’re $15 dollars over in a category she will have a mini disappointment wail even though we’re doing just fine. She’s genuinely concerned and most of you can already tell the Lil’ Mrs sets high standards for herself…
(This is excellent advice for the high-strung ones: “You will have setbacks. And that’s okay. The trick is to avoid several years of setbacks in a row.” – Groovies)
The trend is more important than any given month. If on average you’re spending more than what you budgeted for a category, then you have two options:
- Find a way to decrease spending for that category
- Accept that you cannot or do not want to decrease spending on that and increase the budget for it.
Step 5: Go Back to Step 2
Budgeting forces you to learn a lot about yourself. You’ll better understand your what you’re willing to compromise on and what is truly important to you.
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Step 6: Roll with Life’s Punches
As your life changes, you’ll want to continuously reassess your priorities and make adjustments. Maybe you get a new job with higher pay, maybe you start a side hustle, maybe rent or property tax increases, maybe you get married, maybe you have children to put through college, or maybe you just feel you can use your money more effectively elsewhere. Keep the habit of keeping your budget aligned with your goals and circumstances, and your budget will keep working for you.
Remember, a budget is depressing is more of a mindset. Budgeting (correctly) is an effective tool that you use to help prioritize spending. It’s not a shackle of spending limits but a reminder of what’s important to ourselves. If you’re finding yourself miserable trying to stick with it, then maybe you’re trying to prioritize the wrong things.
One last thing I like to do is put in a Reader’s Highlight. I love the comments I receive and this one is from reader Matt:
There’s definitely a stigma around the word “budget” that drums up images of deprivation, restriction, and penny pinching. But I don’t think a budget has to be a spreadsheet or a record of every transaction. At the very least, a thought out plan for where to use your income is going to get you pretty far.
The great thing about thinking that a budget = a plan is that people who are turned off by “budgeting” are, in fact, actually budgeting! The mental math of figuring out when you get paid, when bills are due, making spending decisions based on how much is in your checking account – we would think, “this person needs a budget!”. They already have one. They’re planning what to do with their money.
I think the key is doing it effectively. Effective planning allows you to take risks, weather storms, and feel safe and secure. Ineffective planning causes you more work, more stress, more do-overs, and gives you more restrictions.
Readers, who else finds budgeting depressing sometimes? Who does the budgeting in your relationship and why?
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