Why New Year Budgets Never Work

As we approach the new year, you may be looking at your finances.  Perhaps you did the same a year ago and put yourself on a budget.  You monitored all your money coming in and going out, keeping track.  It was supposed to help you save and take care of money problems.  Did it work?

If so, keep doing it, but this method doesn’t work for most of us.  It’s like those weight loss diets we are pushed in the New Year; most don’t work either.  Depriving yourself of some essential joy means you load up later.

It’s the same with budgets, where denying you the opportunity to buy something you want makes you spend much more later.

Millions try to start living off a budget at the start of every year, but It rarely works, and here’s why.

You aren’t 12 years old anymore.  You don’t need to be told what to do.  You know what must be done, but you need a few tips on changing your behaviours.  When you are “put” on a budget by someone, you are 12 years old again.  You haven’t hit puberty yet.  Is that how you want to live?

I’m not too fond of budgets.  Never believed in them or cared for them.  I stopped listening to people long before I left school.  I ended up ok.  You will, too.

Here is my suggestion for how to be responsible without a budget.

Decide what is the one thing that is an indulgence for you.  That one fantastic dinner out a month, or those football tickets, or that great piece of high-quality chocolate.  Whatever it is starts there.  Do it first.  Indulge in that one thing.

Next, take out some money each month and put it into savings.  It doesn’t matter how much, but giving 10% or more of your income would be great.  When you have $500 or more, invest it.  Set up an automatic withdrawal.  You never have to consider it; adjust it yearly based on income.  The more, the better.  You will learn to live on less but will keep that regular indulgence.

Next, change or keep the same special thing you buy for yourself each month.  Take care of yourself first. Change it up and reward yourself every month or week. 

You get another part-time job if you need more money to care for your needs.  Never settle for something less than that indulgence every month or week. You are an adult, and you deserve to live like one.

In summary, here are three steps to ditching a budget.

1.  Indulge in one incredible weekly experience that is the best of a tiny thing that doesn’t cost more than 5% of your income.  As your income increases, treat yourself more.

2. Automatically transfer money from your checking account into a savings account each time you get paid.  It may be 5% or more, depending on your income.  Once you have $500 saved, invest it for a long-term hold.

3. Start this immediately, and if you need to earn more, take on more hours at work or get another part-time job or side hustle.  Never stop doing #1 or #2.

If you are on a budget and it works, keep using it. If it doesn’t, try something different this New Year. Maybe these three strategies can help.

Does Money buy Happiness?  Remember, you can check out my Happiness class to build on the daily skills to enjoy deep happiness or tell a friend who may need a boost.  With the 7 Secrets to Happiness, you are in control of your finances and joy in the future.