My first month of budgeting was a disaster, what do I do now?!

Okay, well to put it lightly... Month #1 was a budgeting disaster!  The first thing to do is Don't Panic! ... Well, maybe you can panic a little!

Budgeting Involves Some Trial and Error

It's never too late to get your budget on track again and sometimes it takes a few months of trial and error to really make a budget that actually works for you. Don't let last month's mistakes prevent you from continuing to press forward with getting your personal finances in order. Use last month as an opportunity to improve your approach and learn more about your spending habits.

Aggressive Cuts Sabotage Our Budget

Most folks that are new to budgeting fail because they're overly aggressive in the way that they make cuts.

It's easy to see how you arrived at this... You looked at your income, and then you took a look at all those expenses, and you logically decided that the best way to make your budget work was to hack and slash away at every expense - especially the non-essential categories. And, although, on paper, you were successful in drastically reducing all your expenses, you didn't necessarily accommodate the reality of how you had been spending money before you decided to "buckle down" and get yourself a budget. It's very difficult to go from 'no budget' to 'strict budget' over the span of a single month.


If you think about it... you set yourself up for failure. You made a budget that was too difficult to achieve. And then, in your disappointment of not being able to stick to your budget, you've further strained your relationship with your money.

Don't Give Up!

You probably feel like quitting! (Or maybe your spouse feels like killing you!) But before you quit, let's look at one simple way to make this budget start working for you instead of against you!

Don't Give Up

It's very difficult to live a Spartan budget every day of the month. You actually do need to make some allowances in your budget for times to go out to eat and enjoy yourself a little. How can reasonably you go from a lifestyle of 'moderate over indulgence' to a very strict budget? It doesn't work, so don't give up!

Adjusting Your Budget

Well, the first thing to do is to use last month's spending as a guideline for how to move forward. When you look at it a different way, you were able to discover some spending categorizes where it was easy to buckle down, and a few that were a little more challenging. Great!

Now you know where to truly focus your efforts moving forward, and if you think about it, you've made Month #2's budgeting that much easier you by having some of those variables nailed down. You can focus on those categories where you didn't do so well. Those are the categories that will make or break your budget for this coming month. So, take the time to analyze those one at a time, and based on last month's spending ask yourself some tough questions about those categories. Now is your chance to really dial in on a realistic budget for each of those.

Two Men With Tools, and Many Clockwork Gears in the Background with a banner that reads "Don't Be Afraid to Be a Budget Tinkerer!"

For example, if you budgeted $700 a month for groceries in January, but it turned out that you spent $1,200 a month on groceries. Let's move forward with February assuming that you're going to be at that same $1,200 a month. Then ask yourself does $1,200 a month for groceries actually work for me? Sure it might make my savings rate a little lower than I was hoping or it might prevent me from making this big dent in my debt. But, if you're still paying down some of your debt or you're still saving some of your money every month - you're actually headed in the right direction - just maybe not as quickly as you had originally hoped at the beginning of Month #1!

Armed with Information

Now you've got a realistic idea of the rate that you can pay down your debt or the rate that you can save up money. You're actually doing good because you are armed with so much more information than when you originally started this whole budgeting adventure.

Armed with Information

Oh, and congratulations you now have a framework for Month #2's budget, and thanks to all the heavy lifting you did to truly nail down your monthly expenses, your ready to absolutely crush it this month!

Quick Takeaways

Lastly, take a moment to write down a couple of things that you learned from the way you spent your money in Month #1. One or two items are plenty. Some examples might be:
  • I learned that I need to budget more money for _______.
  • I see that if I want to keep spending money on _______ then I am going to need to re-think how much I am spending for _______.
  • Knowing what I know now about how I spend money, it has made me realize...

Month #2 Now Deserves Your Full Attention

Look Towards Month #2's Budget

Just because Month #1 was a "disaster" doesn't mean the rest of the year has to follow suit! You've learned a ton about yourself and your money habits, so hang in there Budget Keepers and we'll talk again soon!  Feel free to comment below if you have a Quick Takeaway from your own budgeting "disaster" that you think others might need to hear.

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  • I Love this system and this post!! Our month 1 was eye-opening to say the least….. We started off with finding Dave Ramsey, then quickly came to the decision that we need an envelope system to keep us on the right track.

    This is why I bought your budget keeper system back in Feb and we re-started our budgeting journey. There was the full expectation that our results were going to be like that of a yo-yo fad diet, something we stick to for a while, and then give up on because we can’t meet a crazy goal.

    This system has worked so well because it is realistic and can be changed to what we are really spending!! Month 1 for us was a “disaster” but we did save and move forward. We are going into month four and are still making adjustments as our spending changes. Things like eating out and gas station energy drinks really were slowly draining our budget. It is amazing how much we are saving and how easy it is to keep going!!

    I wish I knew about this system years ago, I don’t think we will ever look back. Thank you for also making this fashionable. The typical budget envelopes are not exactly what you want to pull out when we are out with friends or at the store. Your envelopes are stylish and sleek, it is a positive conversation starter.

    Thank you!!
    Kenzie on

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