What to Do When Your Budget Collapses


My budget stopped working a few weeks ago.

I know what you’re thinking: “But Miata, you’re perfect with money…how could YOU have budget issues?” ☺

Well trust me, even I have budget issues and this last month was a doozy!

You may know that I have two children. They had some big expenses come up…as did we.

At the same time, we were invited to several events, which we agreed to attend…none of them inexpensive. We made a huge mistake and said “yes” to all of these without thinking about the budget. Because we overbooked ourselves, our schedules were crazy, so we gave up on groceries and cooking and ate at restaurants. And then with all of the increased stress, we found ourselves spending more money on movies and “fun” stuff.

“Fun” and my wallet were having an all out war and fun was winning.

So what do you do? When this happens to you?

Budget Collapse

Don’t Give Up

This isn’t the first time my budget has collapsed, and I’m sure it won’t be the last. We’ll fall off the horse, forgetting to prioritize what’s important and leave off the rest. We’ll ignore our family meetings because we’re too busy. It’ll happen again.

Our clients have similar issues. Even people with healthy budgets go through huge cash flow crunches. They’ve suddenly run up credit cards because of medical scares or car repairs. It happens.

The thing you don’t do? You don’t stop trying.

The biggest mistake I’ve seen families make is that they throw in the towel, deciding that “the budget doesn’t work.” Of course the budget works! It might not work exactly the way you’d hoped. You might have to dig deeper to see what the problem is, but your budget can and will work if you continue to use it and don’t give up.

Some of the most amazing moments in sports happen when the competitors refuse to take “no” for an answer. In movies, isn’t it common that when everyone else has decided to quit, the hero gives it “one last try?” When I think of the most creative things I’ve done, I remember that it’s difficult to do what we do. But we love the challenge, don’t we? It can be the same with your money.

You have to have that same fierce resistance to failure when your budget doesn’t work. Don’t let a setback be the final answer. Your budget can work…you just have to will yourself to keep playing.

Now, different than the movies, success here isn’t all about guts. A quick look at your system might solve the problem. In my case, my husband and I missed a family meeting and because we hadn’t talked to each other, we’d started individually writing checks for events coming up in our lives. NOT having the family meeting was the system that was broken. Therefore, we’ve redoubled our efforts to keep communicating.

What’s funny? It doesn’t take a long time to communicate about money. Talking isn’t hard…avoiding money discussions is actually more difficult. We genuinely enjoy that time together. Adding that system back into our lives is something we’re both excited about.

Here are the steps to follow when the budget doesn’t work:

1) Ask yourself, “Do I have a system for that portion of my budget?”
2) If “no,” create one.
3) If “yes,” ask yourself “Why did the system break down?”
4) If the system broke down because you didn’t use it, find ways to re-implement…get back up and fight!
5) If the system collapsed because it needed improvement…work on making it better and try again.

When your budget breaks, you’ll find it’ll take a small series of tweaks to re-rail your money train. Rarely will anything work immediately. Our lives are changing and we need to consistently revamp to keep up. In our case, we just needed to get back on the system and work it some more!

Your challenge: What system do you use for money management? Is it working?

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