overcoming budget mistakes

budgetfailheader-01 I'll be honest, when I posted that first blog post about our quest for financial freedom, I freaked out a little. Now it was out there. What if we messed up and went off our system? People thought I was this budgeting and living frugally guru, and if we screwed up, I'd basically be a big fraud. Well, newsflash, we're all a lot more narcissistic than we like to think (thank you, social media!) and no one is sitting around wondering how Matt and I are doing on our monthly budget, I guarantee it. Even still, we messed up big time in March. And I worried, a lot, about how to post about it, or if I should post about it at all. I have a lot more posts in my head in this financial freedom series, but none of them included how to come back after a serious budget setback. I wasn't sure where this fit in.

But the more I thought about it, the more I realized I want to own our mistakes as much as our victories. Mistakes are where the learning happens, as hard as they can be sometimes. So here's the story of our Massive March Budget Mistake. Actually, there's really no story. We sat down at the end of February and wrote a budget for March. And then, we didn't stick to it. We strayed so far off the budget, in fact, that when we looked at our bank statement at the end of March, we realized we spent almost SIX HUNDRED DOLLARS that was not in our budget. The hardest part to swallow? There wasn't a single substantial purchase in any of that spending. We don't have a beautiful crib or bassinet, a garden brimming with spring flowers or even a new TV or gadget to show for it. It was all the little purchases that added up. A $5 Amazon movie rental when we were bored on a Friday (multiply by that times three--oops.) Dairy Queen on the first nice spring day. Panera and Qdoba and Chick-Fil-A when we didn't feel like cooking. It never feels like much, when we're swiping the debit card here and there. "Oh, it's only $11. It's no big deal." It's only when you look back at the bigger picture--once all that money is long gone--that the pattern is revealed, and you can grasp how big of a deal it REALLY is.

So, we blew $600 in March. I cried, a lot. And then we sat on the couch and had a come-to-Jesus meeting about our spending. We identified why it happened, and how we can do better moving forward. I came up with a list of a few things you can do if you, too, find yourself reeling after a month of off-the-rails spending. It's discouraging, to be sure. You might feel like the biggest moron out there, if you're anything like me. Because the truth is, I know the information. I know how to be a good steward of my money. I just didn't do it. It's like Dave Ramsey says, "Personal finance is only 20% head knowledge and 80% behavior." 80% behavior! That means that even if we have the best knowledge in the world, we have to work every day to control our behavior, which is the biggest influence on where our money goes.

Here are my five best suggestions to overcome a major budget mistake. To clarify, this is the kind of situation where you willfully and deliberately spent money that was not part of your budget. I'm not talking about something like an emergency, which of course needs to be dealt with, budget or no budget. It should also be mentioned that if you blew $600 on a tv that wasn't in your budget, the best way to rectify that is to return the tv if you're able, and get back on with your budgeted life. What I'm talking about here is frivolous spending like eating out, renting movies, getting drinks with friends when you know your budget doesn't allow for it, buying tickets to that concert, etc.

  1. Talk about the why. If you're married, sit down with your spouse with the bank statement and look for patterns. Why did you spend so much? Was the spending mostly eating out? Is one of you feeling too much pressure to constantly cook gourmet meals, and the pressure is too much so by 6pm you just want fast food? How can you fix that together? Is the spending mostly on entertainment: movies, concerts, restaurants? Brainstorm a list of fun things you can do on nights and weekends for free! Was one person responsible for most of the spending? In our situation, a good chunk of that unbudgeted spending included on clothes for me, which I bought even though my clothes allowance was done, because I was feeling insecure and sad. Other purchases included impulse buys at the grocery store--things like ice cream and chips, stuff I rarely eat--because I was dealing with some of my tougher pregnancy emotions with food. These are underlying issues that can be figured out and worked through once you sit down and talk about them. It's scary and hard to own up to these things, but super important to get any traction and make progress on your goals. You have to know what's holding you back. If you're single, it's still important to sit down with the bank statement and identify those patterns. Find someone who can help keep you accountable. Maybe it's a best friend you can reach out to for accountability. If you're eating out too much but you really need that night away from your apartment to do something fun, see if you guys can swap cooking dinner for each other, or taking the dogs for a walk one evening. It really IS possible to have a fun, full life without breaking the bank.
  2. Add up the total of what you spent. This is a HARD pill to swallow. I felt so defeated when we did this. But it was important! The final number was sobering. In fact, we did the math a few more times because we couldn't believe it was really that much. It was kind of like a shock tactic. Seeing that number in ink made it very real. Our spending had been out of control, and we could NOT stay on that same track if we wanted to meet the financial goals we set for ourselves this year. It was definitely a turning point moment.
  3. Make a list of how you would have rather spent that money. Brainstorming this list was super hard, because we were sad that we'd wasted all that money. But at the same time, it was motivating, because it showed us that we ARE capable of affording a lot of the things on our list, we just have to be diligent. We actually wrote our list out and keep it nearby as a reminder. In fact, the photo at the top of the post is our list, stuck to our fridge! We could have taken a super nice staycation babymoon here in Indianapolis, staying a night at a fancy hotel, going out to a really nice dinner, gotten a couples massage. We could have bought a super top-of-the-line cloth diaper system with all the trimmings. It was almost enough for us to fully fence our yard, something we so badly want to do this summer. The list goes on and on. Talking through what we would have rather done with that money allowed us to get back in line with our goals. This was especially helpful for me, because it helped me see that I what I REALLY want is a pretty nursery and the money to print some photo books of recent trips WAY more than I want Qdoba on a given day. That reminder was important.
  4. Make a plan for moving forward. Fittingly enough, I read the book 7: An Experiemental Mutiny Against Excess (which I talked about here) shortly after this budget failure, and it was exactly the kick in the pants I needed to make our plan for moving forward. For our plan, we decided to adopt Jen Hatmaker's spending experiment, and we are only spending money in seven places this month: the grocery store (for grocery items only), the gas station (for gasoline only, no fountain drinks!), online bill pay, church tithing, adding to our savings accounts, my barre membership and our essential oils order. We wrote out our April budget to reflect this. So far we are on day 7 and it's going great! I mean, it's CRAZY hard. I want Chick-Fil-A so badly and I'm sad that on Matt's day off tomorrow we won't be having our regular Panera date. But, that's what got us into trouble in the first place. We did have one fail over the weekend at Lowe's. We had a gift card but had lost the receipt, but we were both sure the balance was $60. We had already started a garden project that was half done in the front yard (picture completely torn up grass and a half constructed flower bed) and wanted to get the materials to finish that bed. We decided before walking in that we would ONLY spend what we had on the gift card. I kept track on the calculator on my phone. And when we got up to the register, the total was $60 and change. Swiped the gift card...it only had $30 on it. What we should have done was check the card balance before doing our shopping but, lesson learned.  It's been our only unbudgeted spending in a week, which after last month, is a huge win! And already, in week one of this month, we've transferred almost $800 to savings! That was the other part of our plan; instead of waiting until the end of the month to transfer any "extra" money to savings, we're going to transfer it as it comes in. For instance, in the past, if we had $400 leftover at the end of the first pay period, we'd roll it over to the second pay period. By the end of the month, we'd have budgeted to put a few hundred dollars into savings. But we realized in March that what was happening was we were dipping into that "extra" savings money since it was still in our checking account, and the amount to transfer at the end of the month was far less than we planned. So, now we're taking it out of our checking account as soon as it comes in. Right now, there is literally not a dime extra in our checking account. This check and balance is super important for us because if the money is accessible by debit card, our discipline is clearly not strong enough to handle it right now. And it felt GREAT to color in a bit more of our savings wall after we transferred that money last night :)
  5. Forgive yourself, and move on. This might be the hardest part. I dwell on mistakes a lot, and I'm still sad thinking about everything we could have done with the money from last month. But the reality is that it's done and gone, and we can't get it back. Forgiving yourself, forgiving your spouse, and praying for the wisdom to make better choices in the future is all you can do. Mistakes are going to come--some bigger than others--and the ability to forgive yourself and channel those mistakes into a productive path forward is what counts!

Have you ever had any super huge budget fails? Any tips for doing better after some out-of-control spending? I'd love to know! We are certainly no experts, as evidenced by this :) XO!