The #1 Reason People Struggle With Budgeting

Money Files

Are you budgeting proactively or reactively?

When someone tells me that budgeting “doesn’t work” for them, it’s usually because they’re doing it reactively. They create a budget, go about their life, and then come back to their budget a month later to “check-in.”. Instead, you should be managing your finances proactively, which means you will make decisions based on what you said you wanted to do, what’s actually happened, and what might shift in the days or weeks ahead based on what you know to be financially true.

In this episode, I’m sharing how to shift from a reactive to a proactive approach to managing your money. I’m explaining how to schedule regular “money dates” to look over your accounts and make adjustments in your spending. Plus, I’m sharing how this style of money management can establish financial trust, awareness, and peace of mind.

In this episode, you’ll learn…

  • How one of my clients is learning to manage her finances proactively [0:50]
  • How I guide my clients out of money situations that feel overwhelming [2:03]
  • How to get back on track when you stray from your plan [5:37]
  • Why reactively managing your money doesn’t work and how to shift to a proactive mindset [7:08]
  • Why “money dates” are the key to managing your finances proactively [9:36]
  • How to schedule money dates and actually stick to them [11:41]
  • How managing your budget week to week allows you to make real-time adjustments [15:40]
  • How to manage your business finances proactively [17:26]
  • How proactively managing your finances helps you gain financial trust, awareness, and peace of mind [19:52]
  • How to plan your first money date (plus a freebie to help you get started!) [23:02]

If you’re ready to manage your money proactively, tune in for this week’s episode.

Tune in to this episode to learn how to manage your money proactively and make conscious decisions about your finances.

In the episode…

When someone tells me that budgeting “doesn’t work” for them, it’s always the same thing: They create a budget, go about their life, and come back a month later only to realize they have overspent and they’ve hit very few or none of their goals.

The problem with this method is that they’re not truly budgeting, just reacting to their current spending habits. The key to budgeting well is managing your money proactively, not reactively.

When you manage your money proactively and keep a close eye on your accounts, you’re able to make real-time decisions and adjustments. If you find you’re overspending in one category, you can reallocate your funds. If you’re spending too much on things that are unaligned with your goals, you can pull back. And if you’re consistently straying from your financial plan, you can either permanently adjust your plan or adjust your spending before it becomes unmanageable. 

My favorite way to help my clients proactively manage their money is through “money dates.” Money dates are weekly dates with your bank accounts where you look over your expenses, adjust your budget, and make decisions to get you closer to your financial goals.

Here’s why this kind of hands-on, weekly money management is so powerful:

Money dates create trust.

The biggest reason people don’t trust themselves with their money is they don’t truly understand their numbers. But when you regularly check your accounts, you know exactly how much you have to spend and how much you need to save. As you start to show up for yourself with weekly money dates, it will allow you to release the fear and doubt you have around money.

Money dates create awareness.

It’s not always fun coming face-to-face with your spending habits, but it’s necessary for improving those habits. With weekly money dates, you start to become aware of trends and patterns in your spending. Creating this type of awareness with your finances will help you see your spending habits as neutral, and it will allow you to problem solve for the financial results you desire without judgment.

Money dates create peace of mind.

I want all my clients to be able to sleep peacefully at night knowing they’re on track to reaching their goals. When you keep to a regular financial routine, you get constant reminders of where you are in relation to your end goals.

So here are the takeaways I want you to remember from this episode…

  • The key to budgeting is managing your money proactively, not reactively. That way, you can make decisions in real time.
  • By scheduling weekly “money dates,” you can better understand your spending habits and create a routine for managing your money.
  • This work is work. It might feel overwhelming at times, and you might stray from the course, but there’s always a way to get back on track.

If you’ve struggled with budgeting in the past, here’s your sign to try again, this time by managing your money proactively. And if you need help getting started, download my free Money Date Guide.

If you’re ready to improve your relationship with money and start making moves towards your financial goals, apply to work with me so we can create a plan to get you there.

The Transcript

Hi and welcome to Money Files, I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances. 

[00:00:32] Hello, and welcome back to another episode of Money Files. I am so excited that you have decided to put me in your ears today, wherever you may be, whether you’re getting ready or at the gym or on a walk, I am excited to hang out with you before we start. I actually want to celebrate one of my clients and I think it will be a great celebration for you to hear because I recognize that so many people who desire to work with me. One of their biggest fears is like, What if this doesn’t work? And as a coach, I acknowledge that, and my pride as a coach is being able to support people exactly where they are and helping them not feel like they’re going to have to learn how to budget again, or that this is just something else that they’ve tried and they failed at it. 

So I had a client reach out to me a couple of weeks ago, and she was telling me that she was really defeated, like she just felt really, really defeated. She reached out on our Trello board, which is a tool that I have for clients to contact me in between coaching calls. She is feeling really defeated because she’s able to say, like her head is officially out of the sand, but she’s like, Oh my goodness. Like, I feel like I’m spending so much money. I have this dry cleaning that came up. Then I had to buy this other thing. And so like, things just felt really, really overwhelming. And I’m sure that you can relate, especially if you’ve ever tried to pull your head out of the sand about your finances. I told her I was like, Before you like before we actually try to solve anything. The thing I actually want you to consider is I want you to consider five questions. I want you to sit with what do you know is working? What growth have you already seen? How are you already on the right track? What tools do you have and what would you tell your best friend? And so this is the power of coaching. I’m able to talk to her. I can understand that she’s feeling really defeated. But as her coach, like one, I always tell people, You’re going to feel like if you work with me, you’ve been sprayed by a fire hydrant. But if you trust me, I will be there with a towel to dry you off. I’ll fix your hair. I’ll get you a new set of clothes, whatever it is that you need, because I’m going to have your back. Even when you feel like, Oh my goodness, there are so many things going on. But I just want to share with you a couple of the things that she wrote in response to me. And she says what she knows is working is that she showed up to all of her appointments with me. She’s paid her taxes from the year prior. She’s gotten that all taken care of, and she’s getting a better idea of how much money she should be spending each month based off of what she’s paying herself. The growth that she’s already seen since we work together, she said. My head is definitely out of the sand, and even though I feel completely naked and I’m so embarrassed by my spending habits, I’m in the position to actually make an effort to change. When I ask her when she answered, I should say how she’s already on the right track. She once again acknowledges the fact that she’s showing them to all of her appointments. She’s spending a day or two per week trying to make sense of her finances, even though it’s completely overwhelming and she wants to run and hide. She acknowledged that she’s starting to log her miles, so she knows exactly like how that’s going to count for taxes. She’s reached out to her accountant like she’s completed all the tasks that we’ve done. And when I ask her, What would you tell your best friend? She says these things don’t fix themselves overnight. But changing these habits can be super painful, but totally worth it in the end. You’re already in pain, so why not keep going rather than quitting and having to start all over again in the future and probably a worse situation than you’re in now? You have to do this one day at a time and you have support, right guys. 

That is the real reflection that I could possibly share with you. This work is work. And yes, I help my clients create a budget. But ultimately we’re rebuilding a financial self concept, and sometimes it can seem like things get worse before they get better. But I overwhelmingly hear my clients say that they’re so glad they started that they stuck with it, that they decided to invest in coaching because of the results that they’ve seen and the ability to build that confidence with themselves, the ability to develop trust in themselves that finances don’t have to be hard. So if you’ve been on the fence about investing with me, but you’re like Kina, I know, like I know that this is my logical next step. I’ve decided you’re my coach, apply to work with me. You can go to my website at www.WealthOverNow.com/Appointment And get on my calendar. I would love to support you. 

So I just wanted to, like I said, I’d share that behind the scenes because I’m so proud of this client that I’ve been working with and we’ve been working together for about 30 days and I couldn’t be more excited to cheer this, this client along and all of my clients because they’re doing amazing things. And you’ve probably heard me say it on the podcast before, but financial progress isn’t linear. I think that one of the biggest misconceptions that we have is that there’s a right way to do it and that it has to do one, two, three, four or five like it has to be linear, has to be in a straight line. If you get out of the lines, then you might as well hang your hat up because like, there’s no way that you can move forward. And I want to let you know that that’s not true. I do my work and I think about my work in financial milestones for clients and really thinking about if you can collect this milestone, like being able to notice that you see a shift in your grocery budget over time, or you have started to set up a tax account in your business and you are setting aside a percentage of the income that you get each month into this tax account, like those are the milestones that help you create results. And so that’s what I’m helping clients celebrate on every single call in between calls. That’s what we’re focusing on. So they’re really building the habits and changing how they show up for themselves and making this the last time that they need to learn how to budget. It doesn’t mean that they don’t get off track because that inevitably will happen, but they know exactly how to get back on track because we’ve built systems together. They know how to self coach. They also understand what it is that they need to adjust in order to support themselves to be exactly where they desire to be. All right, as promised, let’s get into today’s episode. 

So today I want to talk to you guys about one of the most common challenges I see and why budgeting doesn’t work. Both professionals and solopreneurs, and the reason that I would say that budgeting doesn’t work is because we are so used to making a list of bills, which some of you think is a budget. It’s not. Or maybe you do have a wonderful spreadsheet where you like, write out everything and you know exactly how money is coming in and money is coming out. But here’s the thing that you’re not doing. You’re not actually proactively managing your finances. See, what you do is you reactively manage your finances at the end of the month. You look and you see that you’re over budget at the end of the month, your credit card balance is higher than you expected, and you have to dip into your savings to pay it off right? Or you are able to pay it off with the money in your bank account. But then you can’t save as much money as you desire to save because your credit card balance is higher than you expected and you just simply don’t know where your money is going month to month, like when you get to the end of the month you’ve made the budget. But inevitably, it seems that budgeting isn’t working for you. 

And the reason that budgeting isn’t working for you is because the only time you monitor it is at the end of the month. So you’re reactively looking at the data and you’re not proactively looking at your data when I’m working with my clients. I really teach them to proactively manage their money. My joke is that your bank accounts, a love language is quality time, so your bank account wants to sit down with you regularly to have a relationship with you. However, you only take your bank account, maybe on a date once a month. And when you do take it on a date, you tell it about all the things. It’s done wrong, right? It has not measured up. And so that is why budgeting isn’t working for you is because everything is very reactive instead of proactive. And so when it’s time for you to actually see if things are working, they’re already not working. And so you can’t make any adjustments because the next month is already upon you and you feel like you failed. And so therefore the budgeting that you had the sheet that you had, you’re not doing anything with it because you just feel overwhelmed and you feel defeated. 

So when I talk about proactively managing your finances, it really comes down to a process that I teach my clients and that’s to schedule money dates. And it literally is like taking your bank account on a date. If you want to set an ambiance and go to a restaurant, have brunch with your budget. Great. I don’t care what you do, but I want you to actually have a relationship with your finances at least once a week. Some of my clients, depending on where they are when we’re in our relationship together, I might suggest that they have like five minute money dates every single day because it allows them to manage the inputs. And when I say inputs, I mean, like how much money is coming in, how much money is going out because you are getting to know the numbers in your bank account. When you have this proactive relationship with your finances, you are able to pick up patterns, you’re able to pick up trends. You can see like, Oh, I didn’t realize that I still had Spotify and I had Apple Music subscriptions, right? And so when you’re having a money date and if you were going through your expenses and you’re checking them regularly, that’s something that you may catch. I was working with a client recently and because we do many dates in our five month partnership, when we do them together, I am also able to point out trends. And so we were talking about, Hey, you know, I’ve seen that your gas budget was around seventy five dollars. But the trend that I’m seeing because we’re actually looking at your accounts is that you’re spending about forty four dollars a week. So that tells me that we need to shift your gas budget, that the eighty dollars actually isn’t realistic. And so that’s one of the things that when we are proactively managing our finances, we can actually make shifts in real time. We can change our budget over time because we’re looking at real data and we’re not just judging ourselves at the end of the month. 

So I will say that if you are listening to me right now and you’re like, What’s the money date, I have no idea. Let me give you some simple tips to start or things that you can do on a money date to proactively manage your finances. Because another thing that I will say is if you followed me, some people think that a money date has to be like two hour, three hour diligent things like, if you don’t have two to three hours that you’re dedicating to your finances, then you’re doing it all wrong. Please, please, please debunk that for yourself, because if you do, it’s like going to the gym, right? Like, you can’t have not gone to the gym for a year and then be like, Oh yeah, I’m going to go fit into this outfit that I want to fit into. I’m. I do a three hour workout like going to force myself to do this really hard, uncomfortable thing by making myself show up for a long amount of time. Like, that’s unpleasant. I want you to think about things that you can do on a money date that feel good. They’re like really small wins and the winds that are going to collectively add up to results. So if you are looking at your personal finances and you’re like, OK, well, what are some of these small wins that I could achieve on a weekly basis, daily basis, whatever that may look like for you, so I can proactively manage the spending plan that I created. 

Here is a list of things that you could do. One, you could check to see if your bills have cleared. So there’s a lot of us that we may have bills that we put on auto pay. Or maybe you’ve even scheduled bills to be paid right? And so on a money date, you might just like to check to see if the bills have cleared. Just because we have set a bill on autopay doesn’t mean that the bill may come out on our own on the right day, or it may not even be for the right amount. So that’s just actively checking to make sure that what we think is true is actually being done. 

And then you can also look at just your banking transactions and make sure you agree with them. So say you were doing something like a 10 minute money date and you opened up your personal accounts and you just wanted to look at the transactions that have happened in the last 24 hours? Maybe you went out to eat, you left a tip. The amount that you expected to pay is that the amount that you see in your bank account, right? Maybe you actually made a return to target or sent a return in the mail? Do you see that transaction actually reflected in your bank account or maybe on your credit card? It happened to me recently that I had returned something and it had probably been like four or five weeks. And I haven’t seen the return and I look at my accounts. I made a note for myself, OK, I actually need to schedule time to make a phone call or get on their chat line so that that way I can get the refund that I’m expecting. So this is just a part of proactively managing your finances and managing your money. 

The other thing that you can do is look at the expenses that you have coming up, maybe before the next time that you’re going to be able to sit down to look at your numbers again or before your next payday. And so I think this one is really essential because this is where I tell people to pay attention to. Maybe there’s if you’re looking at the next week, you’re like, Oh, I’m supposed to go out to lunch one day, I’m supposed to go out to dinner. Another day I’m also supposed to go out to lunch. Another day that might impact like one, it’s going to impact your eating out budget so you can start to see how much money I have left that I said I wanted to spend on eating out or entertainment. Am I in alignment with what I said I wanted to spend? So you can answer yes, no and adjust accordingly. And what’s also true is that you can think about, OK, well, if I’m going to be eating out that much, maybe I actually don’t want to go to the grocery store this week because I know that I’m not going to be at my house and eating as much. So it allows us to be proactive with our finances, not only in the sense of like, do I have the money to eat out, but to let me also make sure I don’t waste money by spending it on groceries because I am maybe not being mindful of what’s going on in my schedule or with my with my calendar. And then when you are proactively managing your budget on a week to week basis, I was talking about this earlier. It allows you to adjust for needed shifts in your spending or with your plans. You’re going to be able to not have to wait till the end of the month and be like, Oh, I went over my eating out budget again, or I went over my grocery budget again. You can actually make the adjustments in real time. If you know that this past week you spent a lot more money out being social, then maybe you shift your plans for the week ahead because you want to make sure that you’re actually in alignment with what you said you desire to do with your money for that upcoming week. 

And then lastly, I would say another thing that you can do is you can, especially for those of you who use your credit card. I’m not opposed to credit cards. I think there’s a responsible way for us to use them. And I have a lot of clients that want to use their credit cards for points. And I always tell them, Well, I want you to know how much money you actually want to put on your credit card in terms of like, disposable income, right? Because that’s how you end up at the end of the month. And you’re like, I have a three thousand dollar credit card bill, but it’s not supposed to be that high. But you also have it set like real parameters, if you will, on how much you would be putting on your credit card per week based on what you said you want to spend in terms of things like disposable income, gas, groceries, eating out, whatever that looks like. So another thing that you can do on a weekly money date is pay off your credit card bill, and that will allow you to see your bank account go down. And it will give you a pulse on your actual spending so you can plan and adjust. I felt like I was talking real fast there for a minute. So hopefully you were able to pause and write down some tips for yourself to proactively manage your personal finances. 

On the business side, the same is similar like we have to sit down and actually look at our cash flow. If we’re not looking at our cash flow, then how are you going on with money you have? How are you going to know what you can choose to invest in or how you’re going to pay people or saving money for taxes? So if I’m thinking about proactively managing my business finances, a couple of things that I can do on a money date are like, you can update QuickBooks. That’s one that your accountant will love because when it’s time to do your taxes, you’ll be ready. And it’s not something you’re going to have to do at the end of the year, but it will also give you an idea of what’s come in, what’s come out. You can keep track of your invoices. I always encourage my solopreneur clients like, Yes, there’s things in QuickBooks. And like, yes, I have systems that invoice my clients, but I also keep an Excel spreadsheet of just invoices that I can expect to be coming in. Clients that I know are coming in, and it helps me keep just a quick visual check of things that are open or things that need to be paid. If I need to reach out to someone about closing an invoice, I can, and it just helps me keep a pulse and be proactive with managing my finances and not reactive. You can also on a money date like actually monitor your business expenses. So looking at how much money I have in my account for expenses? What expenses do I have coming out this week? What expenses do I maybe have in the next 30 days, especially when we’re thinking about annual expenses that are coming out of our business and really just making sure that your cash flow is in alignment with where you see your business going financially. So if we are proactively managing our cash flow as business owners, then you’re going to be able to adjust. You’re going to know, like, can I pay myself? Can I expect to hire people like these are the benefits of actually managing your finances in a proactive manner and not being reactive? There is nothing worse than realizing that you don’t have the money you expected or you haven’t hit the goals that you’ve expected because you haven’t actually kept a pulse on where your finances are. 

So hear me clearly there’s the plan we write, and then there’s actually the plan that we enact. OK. That’s why we want to make sure that we are proactively managing our finances. And as a coach, I know that if I can support my clients in proactively managing their finances, I’m helping them create one of the three results that I want to see all of my clients create. And those results are financial trust, financial awareness and financial peace of mind. Learning how to proactively manage your finances hits all three of these results, so we’re able to build financial trust when we proactively manage our finances because we’re able to release, like fear and doubt about what we can actually do with our money. 

The reason that we financially doubt ourselves is because we don’t know what’s going on. We don’t feel like we’re in control. We know we have money and we know we spend money. But we also know some months are better than others. But as you start to have these money dates and show up for yourself every day or each week in a new way, you’re going to rebuild your personal relationship with money and you’ll start to see money as something that’s solvable. So you want to make sure that you’re building this financial trust. It goes a long way. 

Then there’s financial awareness, so we want to commit to proactively managing our finances. And when we’re committing to proactively managing our finances, we’re going to start noticing patterns. We’re going to start noticing trends. That’s like your eyes. It’s like you’re flipping on a light switch. And all of a sudden you’re going to start seeing things for the first time that you’ve never seen before because you are touching your finances and you’re paying attention to what’s going on. And this is also going to help you develop a relationship with your money where you’re you’re going to see like, OK, well, here’s where I want to adjust my spending or here’s what I want to make sure that I can add into my plan over time because a budget is not meant to be something that you make one time and that you never adjust like, that’s not realistic. Your budget is a working document, and we want to make sure that because you have financial awareness, you’re going to start to be able to plan for things that in the past would have caught you off guard. Or you might realize like I was telling you about my client with a gas that, oh, I need to actually put more money aside for gas or I need to put more money aside for groceries, because what I thought was realistic actually wasn’t realistic for my lifestyle in this season. And so I want to make sure that I can adjust. 

And then lastly, proactively managing your finances. Is this going to help you have peace of mind? I think that’s the number one result. All of my clients want peace of mind being able to sleep at night. Finance is not the number one thing that you’re focusing on. So when you’re monitoring your finances proactively, you are going to be diving into your financial system that you have in place. You’re going to be engaging with this financial system regularly. So you’re naturally going to have peace of mind because things are going to become solvable. You’re not going to be hoping that things work out. You’re not going to just be in the dark about what your numbers are. So you’re naturally going to be creating this peace of mind once again. Like, I want all of my clients and I want you to have financial trust, financial awareness and financial peace of mind. 

So please take some time this week and think about how I can proactively show up for my finances keynotes talking about this money date? Could I potentially try this out? If you go to the show notes, I will actually link a freebie that I have. That is a money date. And it’s just like, get you to be able to sit down, look at your numbers, answer some questions. You could use it for your personal finances. You can tweak it a bit for your business finances. But I just want you to go in and I want you to show up for your numbers. Being able to show up for your numbers, you know, five, 10 minutes, 15 minutes, it’s going to start to change things for you. Things are going to start to feel less overwhelming. And what you’re going to start to notice is that you have more money in your bank account. You have more money in your savings or you have less of a debt balance because you’re able to pay down your debt. As a business owner, you’re going to be able to see that you have like reserves growing in your business. You’re able to pay yourself consistently. Those are the benefits of managing your finances proactively. So hope you found something in this podcast useful for you today, and I hope you will give your bank accounts a little bit of quality time until next time. Have a great day!

Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.WealthOverNow.com/Appointment and let’s get started.

Recent Posts

Leave a Reply

Your email address will not be published.

Continue the conversation: Join the Wealth Over Now private Facebook community

This community is here to encourage and support you in having open and honest conversations about money so you can stop spinning your wheels and finally gain clarity and confidence with your finances.  

Join the newsletter