Why budgets fail

by David Lewis

Another funny story from the fmylife website:


“Today, after a year of dieting and intense workout, I finally reached the skinniest moment of my life, I found out I am pregnant. FML”


Reminds me of the trials and tribulations people have when budgeting.

You save and save and save and… just when you think you’re getting ahead, something pops up.

Car breaks down.

A dog bites your leg and you need rabies shots.

Some teen-aged punk shoots up your windshield with a BB gun.

The pipes in your house freeze and burst.

And the kicker is you spent so much time trying to “be good” with your money.

You made a budget specifically for this purpose… and so you ask your budget, “BUDGET, Y U NO WORK?!”

The answer is not as obvious as it first seems.

Budgets fail primarily for 2 reasons:

They hinge on tedious record-keeping tasks that change every month as days and dates naturally shift. Paydays and invoicing almost never line up with due dates for expenses. Also… banks and credit unions don’t always publish monthly statements on the last day or first day of the month. Usually, it’s on maybe the 3rd or the 5th day of the new month. I once had a bank that didn’t publish my monthly statements until the 9th of the month.

And… it makes simple repetition of reconciling income and expenses impossible. Instead, each month is like a new problem to solve. So, most people get frustrated with it and give up.

Budgets also tend to make it more difficult to have well-defined value-driven goals that are challenging, measurable, and attainable. Almost every budget (including these new-fangled budget apps) I’ve ever seen is focused primarily on controlling and cutting expenses to save money.

That can work but… at some point, you cannot cut expenses anymore. You have to make more money and… budgets are notoriously bad at helping you see where and when this needs to happen.

Savings goals, when they’re introduced, are usually short-term and fleeting. There’s no sense that the budget is helping you save more money. There’s just arbitrary numbers on a spreadsheet that you’re somehow supposed to glue together into a savings plan.

Some budgeting apps try to solve these problems but usually they don’t work because the focus is on giving users a lot of cool whiz-bang features.

The more automated the app, the less you’re actually focusing on your money and behaviors. It’s almost like the goal of the app is to make it so you don’t have to think about your money. On the flip side, the more complicated the system, the less likely you are to stick with it. Building simplicity into a non-automated solution solves these problems but is usually not scalable or if it is… it’s not very secksy. People want cool whiz-bang features and the feeling that they’re doing something useful, even when they’re not.

Which is why I created xFlow.

It’s an app based on my own personal budgeting system that I developed over the last 12 years.

It’s simple, and there’s an element of automation to it so you don’t have to spend a lot of time thinking about mundane budgeting stuff.

At the same time, it encourages you think more carefully about the financial choices you make and applies an “interest rate factor” to all your expenses so you’re consciously aware of the cost of your decisions.

But, it’s not just an app. It’s an entirely new way to think about money management.

Instead of focusing on what you can’t do, the budget gets you thinking about what you CAN do… how much you CAN save and… how to make priorities without having to be told what to do and so on.

It’s not secksy. And, there is a slight learning curve because it’s completely different from every other type of budget you’ve ever tried. But, it’s dead-simple once you get the hang of it and it works regardless of the bank you happen to do business with.

Ready to kick things up a notch?


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About David

David Lewis is a licensed life insurance agent, and has worked in the life insurance industry since 2004. During that time, he has worked with some of the oldest and most respected mutual life insurance companies in the U.S. To learn more about him and his business, go here.