If you’ve never budgeted before, you might be surprised how quickly you’ll feel more at peace once you start. We hear this from newbie budgeters from all over the world! There’s something about finally taking action that feels like a weight has been lifted off your chest. But that doesn’t mean there won’t be some beginner-level budgeting challenges to overcome first.
Most folks start to feel comfortable with their budgeting skills after a few months, and there might be some surprises and setbacks as you learn the budgeting process that best works for you. To help you prepare for these potential pitfalls, we’ve listed seven common budgeting challenges you can expect to encounter in your first three months.
Beginner Budgeting Challenges
1. You Will Overspend
I’m going to let you in on a secret: even the best budgeters overspend regularly. I’ve been budgeting with YNAB for nearly seven years. I teach this stuff. I’m writing this blog post right now, okay? I know budgeting! But there has not been a single month where I haven’t overspent on something. Yep, that’s right. I, Ben, YNAB teacher and community manager, am an overspender. Impulse purchases and unexpected surprises happen to the best of us.
And I don’t beat myself up about it. So don’t do that to yourself. Overspending is a part of budgeting. We don’t have a crystal ball. We can’t see everything coming. So you need to give yourself permission to overspend in a few categories when it happens. As long as you Roll with the Punches and deal with your overspending, and learn from it, you’re in a good place.
And in your first three months, you’re going to overspend some budget categories a lot. A whole lot! Why? Because you don’t know what you’re doing, that’s why! You’re going to forget to check your budget before spending. That’s a habit that takes time to establish. You might get overly optimistic and budget too little for groceries (no, you can’t live on $100 a month with a family of four). You’re going to have a hard day (or ten) and fall back into your old cycles of spending money without thinking. These are all normal budgeting challenges.
Every time you overspend, stand up, dust yourself off, and tell yourself “I’m going to get better at this.” Because you will!
2. You Will Budget More Money Than You Have
The YNAB method is different from what you may have tried before. In most budgeting methods, you forecast. It goes like this: you put your expected income at the top and budget for the whole month at once, regardless of the amount of money you actually have. And it doesn’t really work, because your plan isn’t based on reality.
But with YNAB, you only budget money that you have in your bank account, and that comes with so many benefits. You embrace the scarcity of your money, which will help you uncover your true priorities in a way that budgeting with future money cannot.
But you’re going to say to yourself, “Embracing scarcity doesn’t feel good! I don’t want to admit that I don’t have enough money for everything. Besides I ‘know’ I’ll get another paycheck in two weeks. What’s the harm in budgeting it now?”
Don’t listen to that voice! Work with what you have now, and you’ll end up with a budget you can trust. Stick to your financial plan.
Struggling with how to budget when your income is irregular? We can help with that budgeting challenge too.
3. You Will Get Your Categories All Wrong
Many new budgeters quickly find that the categories they so artfully set up when they first create a budget don’t work very well after a week. They’re either too specific—like having a category for household paper goods and another for kitchen paper goods (woof)—or so general that they give you no insight into your spending and fail to change your behavior (as in: one lump category for all Amazon purchases). Some of you may run into a structural problem. You may have organized your budget in a way that doesn’t reflect your life or doesn’t feel intuitive to you.
We’ve got a ton of advice on how to make your categories work for you, but for now, I just want you to hear this: you don’t have to have it all figured out right away. Your budget is a living and breathing thing. It needs to reflect your life, and your life is always changing! So that means you’ll be tweaking, adjusting, and overhauling your budget for the rest of your life! So if you don’t get it right the first time, that’s okay.
4. A New Month Might Make You Nervous
Starting a new month for the first time in your budget is a rite of passage. You made it this far! You should be proud! But you might be a little nervous, because you’re stepping into the great unknown.
What numbers will carry over into the new month? What numbers won’t? Do I need to create a new budget in the new month, or should I just do the same thing? What do I do with leftover money? There are a lot of questions.
But don’t worry. We’ve got your back! We know you may be nervous about the new month, so we’ve anticipated your questions and given you the tools you need to learn. This post is a great place to start to prepare for the monthly rollover!
5. Your Goals Might Change
Here’s a funny thing that’s happened to me so many times—my goals change. I might decide adding backsplash in our kitchen is a worthy financial goal. It’s important enough that I give “Kitchen Backsplash” its own category in my budget and start saving money for it. But then I find that category can’t seem to attract any money, or that I have no problem pilfering from that category to cover overspending somewhere else. I might realize having subway tile in the kitchen isn’t as important to me as I thought it was. So I take it out of my budget entirely and move that money somewhere else (even though it was a very small amount for the aforementioned reason).
This may happen to you, too! And you know what? It’s a good thing. You and your budget are in a constant conversation. It’s a beautiful back-and-forth that reveals what is truly important to you. So give yourself permission to change up your goals from time to time. It’s all part of the process.
6. You’ll Get Hit by a Surprise Bill
Rule Two, Embrace Your True Expenses talks about saving for non-monthly expenses every month so you’re ready for whatever life might throw your way. All those things that used to be emergencies (car repairs, Christmas, your injury-prone dog) will start to feel like any other monthly bill, because you’ll have the money set aside when they come up.
But here’s the deal. It takes time to build up those True Expense categories. And life doesn’t know (or doesn’t care) that you’re in your first few months of budgeting. You may get hit with that once-a-year insurance bill you totally forgot about or that rusty furnace might break in the middle of February.
When this happens, it can be really discouraging. You’re just trying to improve yourself, then life knocks you down again. But the important thing to remember is you’re still making progress. I guarantee you’re better equipped to handle this now than you were before you started budgeting, even if you’ve only been at it for a couple months.
Roll with the punches, move some money from some other categories to create an impromptu emergency fund to handle this speed bump. And when you do, you’ll realize how much worse it could have been if you didn’t have a budget. You might even feel like a bonafide rockstar! Look at that, you’ve taken a setback and turned it into a triumph. Get excited for the future: it’s only a matter of time until that unexpected disaster that used to derail your finances won’t even faze you anymore.
7. You Will Want to Quit
Making a life change can feel overwhelming. All of a sudden you’re spending more time and energy on something you used to avoid out of shame or fear. Budgeting takes a lot of emotional work! When you’re new at it, it’s extra hard, especially if you’ve had a setback.
You might find yourself slipping back into the old patterns of spending—they just feel easier. But while it may seem comforting to go back to the way you once were living, remember that those old patterns led to stress, debt, and fear.
Push through those moments of doubt and keep on budgeting! If you fall off the wagon, start again. Because the only way to break those old, worn patterns of behavior is to do something different over and over and over again. And the more you do it, the easier it will get. Keep your long term goals in mind.
How to Conquer Budgeting Challenges
You’ve got this. Thinking about your money in a whole new way is no small task, but you can do it! Thousands of others have gone before you, so don’t do this alone! We’ve got TONS of options to get you connected to others doing the same thing:
- Jump into a fan-led Facebook group. Ask any question that’s tripping you up!
- Drop into the subreddit. There’s a little bit of everything for your scrolling pleasure.
- Browse #YNABCommunity on Instagram. Success stories abound, be inspired.
- Join a Live Q&A. Our teachers show you how to break the paycheck to paycheck cycle!
- Watch a video course. These short clips cover the ins-and-outs of using the software.
- Sign up for the 30-Day More Money Challenge for some money-saving tips, accountability, and inspiration.
- Start a nerdy budgeting support group in your living room, or whatever else you can think of!
The point is to talk to fellow budgeters about your journey. They’ll encourage you and tell you stories of their own beginner budgeting challenges. And when you’re a budgeting pro, you can do the same for others. And what a joy that will be!
Just keep budgeting, my friends. Just keep budgeting!
Still using a spreadsheet or budgeting software that isn’t quite working for you? Try YNAB for free for 34 days. If you’re already a YNABer, get a friend on board so you have a budgeting buddy for your personal finance journey!