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8 Reasons Why Your Budget Isn’t Working
8 Reasons Why Your Budget Isn’t Working
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Money Management

8 Reasons Why Your Budget Isn’t Working

Eunniah Mbabazi
June 15, 2022

Anyone keen about their finances should have a budget. Regardless of what you earn, it is essential to have a saving and spending plan. Without a budget, you can easily spend a lot more than you should, and you would have a tough time achieving any of your financial targets.

But in some cases, budgets don't work. Even if you have planned everything to the smallest detail, you may find that you are still going broke before the end month, or you just cannot make the budget balance.

If you find yourself in this situation, here are some reasons your budget is failing.

1. Your Expenses Are Higher Than Your Income

What is your net income (income minus your expenses)? If it is a number below zero going negative, then you are spending much more money than you make. At that point, the problem ceases to be your budget. It is your spending habits. 

You have to review every spending category and highlight which among those areas you can cut back on.

This exercise can feel daunting, especially if you overspend in areas where you most feel comfortable. However, trying to live within your means would put you in a better financial position.

Read Also: 10 Warning Signs You Are Living Beyond Your Means

2. You Don't Have a Plan for Your Money

Budgeting is a great way to track your money. With proper budgeting, every shilling in your account has to be pre-determined on how it will be spent. If you have Ksh50,000 in your account, then your piechart should allocate all that money to your expenses and savings.

For example, your budget plan should show your Ksh50,000 divided among savings, food, rent, utilities, etc. 

At the end of the income cycle, all the money you earned should have been dedicated to various categories.

Most people choose not to plan and remain cautious with how much they use each income cycle. While it works well for some people, it isn't the best system since you don't have money designated for specific categories, and you may find it challenging to pay for emergencies or keep yourself on track with your spending.

Read Also: 6 Simple Steps to Create a Working Budget

3. Not Enough Money Allocated for Some Categories

Because some expenses fluctuate from month - to - month, your budget might be ineffective unless it includes some level of flexibility.

It’s very easy to underestimate how much money you will spend on some categories, especially when it comes to costs that can significantly vary from month to month, like food or the price of petrol. 

If you find yourself consistently overspending in those categories, you might want to increase the allocation for those areas in your budget. Keep in mind that this could mean reducing your spending in some other areas to keep yourself from going over your budget.

Budget inconsistencies are inevitable, so you should have a plan to balance out those peaks and troughs.

Read Also: Is it Time to Rethink Your Budget? Here’s Why 

4. You Aren't Sticking to Your Budget

For your budget to work, you have to actually use it and use it faithfully. 

There is no point in writing the figures on paper, putting them in a drawer, and forgetting all about them. 

Refer to that piece of paper as often as possible throughout your income cycle. Track your expenditure while comparing it to what you've budgeted to see how you're faring.

Read Also: Needs Vs Wants; A Budgeting Dilemma That's Making You Poor

5. You're Cheating

You go on a diet when you want to lose a few kilos of body mass. But if you cheat on the diet, it will not help you lose weight. The same concept applies to budgeting. It just simply will not work.

It is a very common issue for debutants to understate their expenses or overstate their income, and the problem is that nobody will punish you for cheating on it. However, there will be some consequences. 

These consequences slowly pile up till they get to a point where they cannot be ignored. You are then forced to dip into your savings account to cover regular bills and get rid of debt collectors.

Read Also: Tips For Living On A Tight Budget Like A Pro

6. You Aren't Practicing Self-Discipline

Staying loyal to your budget will require that you occasionally say "No" to some unnecessary purchases.

Developing self-control and discipline is among the biggest obstacles to budgeting. You should resist making impulsive purchases.

If you have set your mind on a big purchase, put it off for as long as it takes in order to review your budget and see if you can afford it. 

Practice some self-discipline, especially if you have not explicitly accounted for them in your budget.

Read Also: Critical Dos And Donts Of Managing Your Money 

7. You Forgot to Include Some Expenses

Forgetting or overlooking expenses is another factor contributing to the failure of your budget. Since you didn't prepare for it, forgetting to include some expenses can seriously blow your budget. 

If you do not include every category of expense when creating your budget, it can seem faulty when comparing your income to your spending at the end of the income cycle. Use purchase receipts, M-Pesa statements, and ATM withdrawal receipts to note down all of your expenses.

Read Also: Spending 101; Skills to Keep Your Expenses in Check

8. You Don't Have an Emergency Fund

Life is going well, and you might be paying down most of your debts and thinking you've got your finances under control. Then something unexpected happens. A member of your family is admitted to the hospital, but you already used your extra money to pay back a portion of your high-interest loan debt.

Life throws little emergencies at us every now and then; for this reason, we have to set up an emergency fund.

An emergency fund keeps you prepared for unexpected occurrences. If you do not have an emergency fund, you can start by putting some money away every month till you build up savings that are solid enough. A standard target is to look toward setting aside three to six months' worth of living expenses.

You should be able to maintain the same lifestyle if you lose your job or income. If you haven't set up an emergency fund yet, do so and start saving money. Shoot for Ksh100,000 as your first goal.

Read Also: Easy Steps to Create An Emergency Fund in a 100 Days


Sticking to your budget is not as easy as it sounds. It is challenging, and many times you come across so many temptations that push you to stray away from your budget. But it isn't impossible. Take some time to figure out what is working and what is not. Doing that can help you move financially closer toward the light at the end of the tunnel.

Eunniah is an experienced business writer and editor. She is also a published author with two titles under her belt; Breaking Down and If My Bones Could Speak. You can find Eunniah on Twitter @Eunnyversal

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