when the budget doesn't work

Let’s face it; we are imperfect people in an imperfect world. We can’t expect anything we make to be perfect, including our budget. We’ve all had times when the budget doesn’t work when put to the test. Sometimes there’s more month than money, sometimes it’s a true emergency, and sometimes it’s just a lack of planning. Sometimes it feels like we just struck a match and sent our hard-earned money up in flames. Imperfect people create imperfect budgets. Here’s what to do when the budget doesn’t work.

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Ask Yourself why the Budget Doesn’t Work

After you’ve tracked all the expenses and surveyed the damage ask yourself why the budget didn’t work this month. Or last month. Or maybe ever. Be honest with yourself; did you have the best of intentions on never eating out, seriously underestimate how much you spend on gas on a monthly basis, or forget to budget for that one thing that’d been on the calendar for six months? You know, that thing – the in-law’s anniversary party you cohosted, the best friend’s birthday dinner you looked forward to for months, your sweet niece’s birthday…

True Emergencies…

Or, was it truly an emergency, something you didn’t see coming? Do you have an emergency fund started? Have you set money aside for emergencies? Or just made a plan to set money aside? There is a big difference. Emergencies are no fun; we experienced one this summer; it just now feels like our son is “out of the woods” with this whole ordeal and he has function back in his thumb. Read Our Emergency: Why We Cash Flow Medical Bills for more on that ordeal to catch up.

Our emergency fund is not large or even “fully funded,” but building it up was already a priority and that made a big difference for us; we would’ve made the same decision to operate on his hand with our without savings, but knowing we had that cushion when hospital bills started rolling in (and they JUST started rolling in) helped us breathe a little easier and just focus on our son without the added stress of wondering how we would pay for his medical care.

…or Disasters Waiting to Happen

We fell into this category recently; I felt all adult and responsible when I suggested to my husband we go ahead and start an auto sinking fund. We opened it with the minimum amount required, $100, and not long after one of our vehicles had a dead battery which cost more than $100 to replace. We hadn’t even had a chance to contribute more money to our glorious new sinking fund. Why wasn’t this car cooperating?!

We know I need the transmission fluid changed in my car. We also knew I had one tire that hadn’t been replaced yet. Both were (and one is) a ticking time bomb waiting to go off. The tire almost did. It warped, resulting in a very bumpy ride home one day and my husband throwing the wheel in the back of our other SUV (with the brand new, unbudgeted battery) for me to haul to Firestone the next in order to have a brand new $208 tire mounted on the rim. Yippee skippee.

The World’s Best Grammar Checker

And wouldn’t you know that both the battery and the tire situations happened right before payday when the money just wasn’t quite in the checking account to comfortably cover the bill? That’s how Murphy works my friend.

Ever heard of Murphy’s Law? “If anything can go wrong, it will.” Isn’t that the truth!

– me, taken from Emergency! Why You Need an Emergency Fund Now

When our Budget Didn’t Work

Buckle up friends, I feel like this is post is going to be a long one! Here’s where that “confession of sorts” comes into play. I was (overly) confident when we bought that battery that I could “find” the money in that new month’s budget to cover it without dipping into our emergency fund so I told my husband to just put it on the card. The one we don’t keep a balance on. Um-hmm. We did that. We charged the card. Strike a match.

And guess what friends, surprise surprise that money was NOT in the budget that month to cover it all. We even charged a much needed, but not planned day trip to the Oklahoma Aquarium on Labor Day because my husband had the day off and we rarely take our kids anywhere to do anything out of the ordinary. Those aquarium tickets were the ONLY item paid off on the credit card that month. Um-hmm. We did that. We carried a balance on our previously paid off card. Strike another match.

Then came the tire and the painfully obvious, but at this point, a not very surprising thing to do seemed to be to charge it. So I did. I didn’t like it, but for some reason, I convinced myself it was the only way; we’ve been budgeting and saving extra to put in the E-fund to pay off our son’s medical bills. Why would I spend it on something else? Match strike, our budget is all up in flames.

Then the next thing you know we’re shopping a clearance section at my hubby’s side hustle and you guessed it – somebody please bring me a fire extinguisher! This budget fire is officially out of control. This month’s budget did have money for clothes, but this wasn’t the right week to buy them. They didn’t fit in with that paycheck’s responsibilities. Just because it’s in the budget doesn’t mean it’s in the bank yet.

What We Did to Correct a Budget When it Didn’t Work (and we didn’t work it)

That was the last straw. We felt good about the “deals” we got on our two items of clothing, but not how we bought them. I lost sleep, I felt like a fraud, I know better dang it! We decided that the money we’d pay in interest making monthly payments was far more costly than any interest our money earns in savings. We can still pay our medical bills, build our fund back up, and learn our lesson. Again.

We are imperfect people working our imperfect budgets and sometimes our best isn’t good enough. Sometimes we can’t make the ends meet like we think they should. And sometimes, we let that fact discourage us from continuing to do our best. If we’d have gotten out our Murphy Repellant from the get-go and cash flowed those necessary auto expenses, actually let our emergency fund do what it is designed to do – I wouldn’t be writing this.

But maybe, just maybe we did what we did and I’m writing about it like I am now so you can sit there wherever you are, read this, and realize you’re not the only one who doesn’t get this whole budget thing right, whose budget doesn’t work.

So What do You do When the Budget Doesn’t Work?

You dust yourself off, forgive yourself for any mistakes you made, learn from them, and… work on your budget some more! Do you see the problem immediately glaring back at you? Is it an income shortage? Do you need more money to make those ends meet every month? Ask for a raise if you’ve earned it at work, get yourself a side hustle, or start brushing up your resume and go get a higher-earning job. Hop on the minimalist movement and sell some stuff you don’t need or use. Do something to get more on the income side of your budget.

Did you experience an emergency? If so, I am truly sorry. I hope you’ve recovered. Learn from this experience and make sure you don’t repeat it (financially at least) again. Build up your Murphy Repellant by funding that emergency fund ASAP. Find more ways to cut the budget. Need some ideas? I have 7 Budget Cut ideas for you. Looking for more ways to save? Here are 30 Frugal Money Saving Tips you can start to implement today.

Do you have large expenses coming your way? Start a sinking fund. Or three. Whatever you need to make sure those expenses are covered. Just don’t give up on your budget the first sign you get that it isn’t working. That is one of the worst things you can do in this situation. We’re all imperfect, so we can’t be too surprised our budgets are as well. Sometimes it isn’t the budget that isn’t working, it’s us. So we just have to get back to work and make the budget work too. Stay frugal my friends!


cut it out!

Cut it Out Already!

Chances are if you’re reading this you are already budgeting. If not, or if you are new to budgeting, refer to my Budgeting page and be sure to read my other budgeting related posts. If you want to save some money, pay off debt, and just aren’t seeing how it’s possible when you look at your budget, you’re going to have to take a hard look at a few categories and just cut it out! I’ll say it again; if you need room in your budget and don’t foresee winning the lottery or inheriting a million dollars any time soon you need to make some budget cuts.

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You may have already figured that part out but are wondering where to start. If you are looking for ways to simplify your budget and save some money you are in the right place! Here are 7 places to cut your budget.

1. Cut the Cable

You don’t need 150 channels in order to be entertained. According to USA Today, the average cable customer is paying $85 a month for cable! If you have a satellite you’re likely paying about $100 a month. That’s a lot of money! Read my post Emergency! Why You Need an Emergency Fund Now! and you’ll see that the average American family doesn’t have the cash to handle even a $1,000 emergency. $85 a month totals $1,020 a year – enough for that beginner emergency fund to get you started on your debt-free journey.

Now, I know what you’re thinking, but you won’t be bored at home if you cut the cable; there are so many affordable alternatives out there. My family has Amazon Prime and we own a Fire Stick. In addition to free shipping on our budget purchases, we get unlimited access to Prime Original entertainment offerings, movies, and TV shows. The best part is we get to watch at our own convenience! You can also use the Fire Stick for other apps and platforms, turning your TV into a SmartTV. Did you know Amazon has a trade-in program which gives you a 20% discount on the new 4K Fire TV Device when you trade in select Fire TV, Roku, or Apple TV devices? Click here for more details.

In the past, we had Hulu and have considered Netlflix. We watched Hulu on the Fire Stick and the kids loved access to Disney shows. We did cut the Hulu from our budget but have talked about bringing it back. Most entertainment subscriptions add up to $10 a month or less plus tax. You can even use Sling and only subscribe to the live TV networks you watch. That’s a $75 savings on top of cable! What are you waiting for? Cut it out already!

2. Quit Leasing Your Mobile Phone

You don’t actually need the latest and supposedly greatest smartphone on the market. You especially don’t need it if it comes with a $1,099 price tag like the Apple XS Max. Seriously, it’s a phone. You can buy yourself a Dave car for that price!

We don’t even have cell phone contracts anymore and it is great! I have a smartphone I paid for outright on a month to month unlimited talk, text, and data plan that costs $45 a month plus tax. That is just over half the monthly average of $80 most Americans pay for their service! I have no complaints about my phone or service.

You can even buy an unlocked smartphone online. Get out of your contract if you can! With so many options for wireless service without a contract, you’re sure to find the right plan for you.

3. Cut the Home Phone Line

Chances are you aren’t saving as much money as you’d think to bundle your home services. If you cut the cable you might as well cut the home phone out as well. Chances are you just use your cell phone anyway. If you aren’t willing to cut the cord completely there are also plenty of options out there more affordable than what the cable company offers.

We had a Straight Talk home phone line for a while, and it was under $15 a month with tax for unlimited nationwide calls and all the bells and whistles. Most even let you keep your number when you make the switch. We canceled ours since it didn’t get any use.

While we may add a home phone line when the kids get older and want to talk on the phone more, but we’re just not there yet. Bottom line, if you keep a home phone line you can find a better deal. You just have to look. Start with this Google search link.

4. Cut Back on Your Coffee Shop Habit

Yes, I went there. I love my coffee, but I just don’t love to pay $5 a cup for my daily habit. I drink homebrew instead. Every once in a while I still get myself a mocha as a treat and there is nothing long with a monthly catch-up with a dear friend over a fancy latte.

However, stopping at the drive-thru every day can absolutely kill your budget. And your waistline; look up the calorie count in your favorite cuppa if you need more motivation.

Do yourself a favor and drink some homebrew every morning. Treat yourself once a week, month, or quarter as your budget allows. You can get a decent coffeemaker for under $25. So just do your budget a favor and take a long hard look at what your coffee habit truly costs every month. If it fits in the budget, great. If you still need more breathing room cut it back if not out.

5. Evaluate Memberships and Subscriptions

I’m not saying you have to cut them all out, I’m just saying you need to look at them. Ask yourself if you’re getting any value out of them. Do you really save money going to the big box membership store or do you totally lose your mind (and your budget sense) when you walk in and see all the “amazing” and “exclusive” deals that await you when you walk in through those oversized doors?

Do you have any redundant subscriptions/memberships? Get rid of the one that offers the least value. For example, when we were looking for additional ways to cut our budget we cut out one of our two entertainment subscriptions. Hulu just doesn’t offer free 2-day shipping on anything and we could stand to spend a little less time in front of the TV anyway.

Are you paying for a membership you no longer use? Use it or lose it! Get your butt back in the gym or cancel your membership STAT.

6. Cut Back on Dining Out

If you find yourself hitting up the drive-thru on the daily (maybe ordering sous-vide egg bites with that latte) or reaching for a takeout menu almost every evening after work you may have a problem with this area of the budget.

Cut back to dining out once a week if you need to taper down. If you find you have no self-control in this area you may need to stay out of the drive-thru. or restaurants for a while. Do what works for you and your budget. Your wallet may not be the only one to thank you; your waistline and stomach may be a lot happier for it too!

7. Get the Junk Food and Convenience Groceries out of the Shopping Cart

Say hello to batch cooking and goodbye to the convenience section and the frozen meal aisles of the grocery store! Not only will you cut out extra spending, but extra sodium, calories, and other preservatives as well! You don’t have to cut them out altogether, but don’t plan your week around frozen and deli foods.

Cook a double batch of a favorite meal from scratch once a week and freeze the second half. The next time you’re too tired, worked late, or life threw some other curveball at you just before dinner you can reach for a home-cooked favorite from the freezer instead of a carryout meal. It may even help you spend less on medication and doctor visits if you change your diet.

Did you know you can make spaghetti and meatballs at home for around $3 a serving? This is a meal you can have on the table in under an hour (even less if you batch cook and freeze some meatballs). It’s filling, economical, and when eating proper portions and paired with a salad, it’s healthy. It’s not hard. It just takes planning. Stay tuned for an upcoming post dedicated to saving money at the grocery store.

What Have You Cut?

Already done these? Great! What other ways have you cut your budget? Let me know how you cut your budget!


In Case of Emergency…

Sooner or later an emergency is bound to happen. Sometimes more than one will happen in a short time. Sometimes they’re not so little. Whether you call it your E-fund, your Murphy repellent, or just your savings you need at least three to six months worth of expenses set aside. This money is not your 401K, your Roth IRA, or another type of investment account that comes with penalties for early withdrawal.

This is a separate account (think high-yield savings, traditional savings, or even a money market) you can easily access funds from when you need them.

What is an Emergency?

An emergency is an unavoidable, unplanned circumstance that leads to an unavoidable, unplanned large expense. Think job loss, a major illness, unplanned leave-of-absence from work, not plane tickets are cheap so we’re going to Maui. True situations you need to make sure that as unpleasant or traumatic as they can be your family is ready to weather the storm financially.

Not ready for one?

Most Americans aren’t; in fact, according to a recent Bankrate survey, most American households can’t even handle a $1,000 setback. This in itself is an emergency! If you really think about it, $1,000 doesn’t go far in a true emergency. It might not even cover your deductible if you settled for a low premium, high deductible plan. It probably won’t replace the old hot water heater that seems like a ticking time bomb in your basement either.

So what do you do?

You need to adjust your budget to start saving for that emergency before there is one. Ever heard of Murphy’s Law? “If anything can go wrong, it will.” Isn’t that the truth! Don’t wait for an emergency to start your emergency fund! Look at your monthly budget and see if you have any wiggle room to add to your savings. Don’t have a budget? That’s an even bigger emergency! See my Budgeting pages for information about how to get started.

Any amount you can set aside will be beneficial. If you just save $100 for a year at the end of that year you will be in a more comfortable position than most American households.

Maybe you have a side hustle. If you don’t, but want suggestions, see my article “How do You Hustle? Legitimate Side Hustle Ideas,” for more information. Instead of throwing the additional stream(s?) of income at debt consider funding your emergency fund first.

However you choose to fund your emergency fund, be sure to start! You can’t prevent bad things from happening, but we can do our best to make sure we are prepared if and when they do happen. Don’t let that inevitable $1,000 emergency wreak havoc on your family’s finances; get your emergency fund ready as soon as possible!

My family is in Baby Step 3; we are out of consumer debt and beefing up our emergency fund. We currently have almost 32% of our goal saved. I am trying to get creative stretching our budget and working some small side hustles to add to it. You can follow our progress on Instagram under my handle @alifeonadime. We are 9 days into July and I’ve managed to save $30 so far! It isn’t much, but every little bit helps! Follow along for updates on my family and share yours with me here in the comments! I would love to cheer you on too!


avoid that sinking feeling

Avoid the Sinking Feeling that Comes with not Planning Ahead

Set Money Aside for Larger Expenses in Advance

Sinking funds are an excellent way to cover infrequent, larger expenses and avoid that sinking feeling you get when you reach for the credit card to cover an expense you knew was coming but just didn’t plan for. They aren’t as complicated as they may sound either! We used them to cash flow home renovation projects and major purchases long before we knew what they were called.

In essence, a sinking fund is a separate bank account or cash envelope you contribute to for a specific, typically larger expense. Say you plan to “sink” money into vehicle maintenance, a new(er) car fund, or save for a down payment on a house. You may pay your insurance premiums quarterly or annually for a discount. You expect these expenses and set aside money on a regular basis. These are all sinking funds. You may have one or more going and simply refer to it by its purpose; the car fund, new house fund, maintenance fund…

More recently we employed the sinking fund method to cash flow our property tax bill. We set aside a specific amount each month for three months and then paid the bill in full. This avoided an uncomfortable budget deficit one month or the need to raid our primary savings.

Or, you may find it beneficial to set up sinking funds for other recurring expenses that add up but don’t necessarily happen every month. Examples include a birthday fund, Christmas gift fund, clothing, etc. Avoid that sinking feeling and the urge to go into debt when the kids hit that inevitable growth spurt or tear through the knees of all their good pants.

You know it’s going to happen, so why not plan for it?

If you have any questions or just want to join the conversation drop them in the comments to this post or send me an email. I would love to talk more.