The Therapy Business Podcast

Why Your Budget Fails and How to Make It Stick Once and For All

• Craig Dacy • Episode 51

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Most budgets fail because they aren't based in reality, are too rigid, or lack a clear goal behind them. Understanding these common pitfalls can help you create a budget that actually works and sticks long-term.

• Unrealistic budgets fail—either from guessing amounts or basing them solely on past spending habits
• Create budgets based on what reasonably costs to meet your needs, not arbitrary numbers
• Rigid budgets lead to burnout—build in flexibility for life's unpredictable moments 
• Allow breathing room in your budget categories to accommodate unexpected expenses
• Connect your budget to meaningful goals that motivate you when things get tough
• Everyone can become good with money—these skills can be learned with practice
• Working with financial coaches provides accountability and guidance for faster results

To schedule a free consultation with our coaching team, click the link in the description. We'll help identify immediate actions you can take to improve your practice finances and share how our coaching program can benefit you.


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*Intro/outro song credit:
King Around Here by Alex Grohl

Speaker 1:

Have you been on the budgeting hamster wheel, where you start budgeting, get overwhelmed, frustrated and give up, and then, months later, you try it again, just for the same thing to happen? Well, today I'm going to walk you through why most budgets fail and how you can fix it. My name is Craig and I'm the owner of Daisy Financial Coaching. Our team is on a mission to make your therapy practice permanently profitable. If you own a solo or group practice, we're here to help you build a business that creates more time, makes more money and serves more people.

Speaker 1:

This is the Therapy Business Podcast. Now you know the cycle. I've lived it myself too. It's where you start making a budget you feel just like really motivated, you're all about it. And then a's where you start making a budget. You feel just like really motivated, you're all about it. And then, a couple of weeks later, a month later, you're totally ignoring it. Why does this happen? And, truthfully, it's. You're not alone If you're feeling this. I went through this for years.

Speaker 1:

Every client who comes to us deals with this and, honestly, even to this day, there's months where it can still happen. There's months where we get overwhelmed. There's months where we fall off the wagon and we maybe go a couple of weeks without tracking our budget and we have to get back on that train and get it moving again. Well, the hardest part is the starting. So when you first start, this can be an issue of starting and stopping. Starting and stopping and it's almost makes us hate the whole idea of budgeting. It makes us throw our hands up and not even want to try it again. Well, there's three key reasons that budgets fail, why you've been on this cycle, and I want to walk you through those so that we can avoid getting back on this hamster wheel that we're stuck on and you can finally make some progress and finally have a budget that sticks and that works for you. Number one is that your budgets aren't based on reality. Most people are guessing their numbers or, honestly, even worse, we're going backward trying to figure out what are we spending. So here's the deal. We're thinking, okay, maybe we spend $400, $500 on groceries, when in reality we're spending like $1,000 on groceries. Maybe we're going back into our bank statements and we're calculating how much are we eating out every week going out to eat, and we're like, wow, we've been spending $1,000 on restaurants. So I guess that's what we need to be budgeting. Here's why neither of these approaches work.

Speaker 1:

The guessing your numbers approach is really just you trying to pick a number out of a hat and hoping it works, and then, when it's not enough, we get frustrated, we fall off, we get overwhelmed, we think this whole thing doesn't work. Or we beat ourselves up, we're saying man, we are overspending, we're going over budget, when in reality 500 bucks maybe wasn't enough to begin with in that groceries. It's kind of like when you are going on a diet and you're like you know what, I'm not going to eat anything. It's kind of like when you are going on a diet and you're like you know what, I'm not going to eat anything, and maybe for the first day you're hungry but you make it through, but after a day or two it's just not going to work, it's not sustainable. And so that's what we find with guessing numbers.

Speaker 1:

Now, a lot of times our instinct is to go back into our bank statements and to add up totals on what have we been spending. And here's why these numbers are not necessarily baked in reality. It's because you weren't tracking, we were just spending without a plan, we were spending reactively, we were not in the mood to cook or we forgot to thaw the meat, so we went out to eat. We were doing all these things, and so that number is likely a lot bigger than what you really need. So the way to fix this is what I tell people is to sit down and really think about what is it? What do we think it costs to feed our family?

Speaker 1:

Let's say you go out to you know pretty let's. Let's use restaurants, for example. You know what it costs for your family to go out to eat to a restaurant. For us, let's just say for you it's like 50 bucks, right, every time you go. On average it's 50, depending on the restaurant you're going to, depending on how many kids you got. If it's 50 and you're going, okay, what would be reasonable amount for us to go out to eat every week? Let's say twice, okay, so twice a week. That's a hundred dollars a week. Four hundred dollars a month is what we're going to budget for restaurants, maybe 500, if you want to round it up a little bit and then try that, approach it with curiosity and see how it works.

Speaker 1:

And that leads us to the second reason why budgets fail is they're too rigid. We're not approaching these things with curiosity. We're not just being open-minded and flexible, it's the. We've set $500 for groceries and if we don't achieve it then we're failures. And this doesn't work when in reality life happens.

Speaker 1:

We need to create space for that. Your car breaks down, a friend invites you to go out to eat, the kids get sick, or they have a sporting event or registrations, or they need 10 dozen cupcakes for a bake sale at school. Whatever it is, life happens. That we can't necessarily plan for exactly as it is when the month starts is not realistic either. So your budget should move with you, it should be fluid, it should have some room for error. Kind of going back to that example in the restaurants how I said twice a week is $50, $100 a week, so 400. And then I said maybe we should round it up to 500. That leaves space, because there might be a week or two where you go out to eat a third time, or again a friend invites you out, or you totally burn the dinner and you're like we need to order a pizza to get these kids fed to school night, whatever. So giving yourself that breathing room to to move a little bit without feeling like you've made a mistake.

Speaker 1:

Now, a lot of times, our reaction to this is we're trying to pay off debt or we're trying to build our savings, we're trying to get our spending under control and we're told we should not be spending any more than what we plan and we need to be really regimented. However, when life does happen, or when we're denying ourselves too much or we're not creating that flexibility, it can lead to burnout, and that's what can cause us to give up on the budgeting thing, to fail, to just say whatever and throw it out the window. The third reason that budgets don't succeed is that there's no clear goal behind them. So maybe budgeting in itself is not that exciting. It's not motivating.

Speaker 1:

You have to have a reason why. Again, going back to, let's say you're going on a diet cutting calories and giving up sugar and giving up foods. Back to, let's say you're going on a diet cutting calories and giving up sugar and giving up foods you love. Who's going to do that unless they have a reason behind it? Whether it's you're trying to fit into a suit, or whether it's you're trying to get healthier, get your cholesterol down, you're trying to combat some health issues. Whatever that reason is, there's a deeper reason behind simply going on a diet.

Speaker 1:

Budgeting is the same. What is your deeper reason? What are we trying to accomplish? What are you wanting life to look like? What are you hoping to achieve? Are you trying to pay down debt? Are you trying to create breathing room? Are you hoping that you can go on more vacations or spend money on the things you want to spend it on? This is the deeper why, and we want to get in touch with it, so that when budgeting is hard, when things derail, when things go off the hinges, we don't just throw it out, because when things get tough, if we're just budgeting for the sake of budgeting, we're not going to do it. If we're budgeting because of a deeper rooted issue, when things get tough, we're gonna stick with it, because that thing is so important to us that it's not as simple as just throw this budget out the window because it just didn't work this month.

Speaker 1:

Budgets don't fail because you're bad with money. I'm a firm believer that everyone is good with money. Now, maybe you've struggled with it to this point, but you can be good with money. You're just not there yet, maybe. And but you can be good with money. You're just not there yet, maybe. That's okay. It takes work.

Speaker 1:

None of us are born with the innate ability to budget and manage funds. Money is emotional, it's tied to a lot of different things, and so it's reasonable for us to have emotional reactions, for us to struggle with managing it in a way that is most cost effective. Now, because you're not born with those innate abilities, a lot of people need some help and guidance in making this a system that sticks and helps them keep to it. So, while those three key or three reasons are the biggest reasons people fail on budgeting, a lot of times it's deeper than that. A lot of times you need accountability, you need guidance, you need someone to help you find the path around a lot of those hurdles and get you there faster and make this something that sticks completely.

Speaker 1:

That's what our team of coaches does. So in the description below is a link to schedule a free consultation with our team members. They're going to get to know you what you're trying to do, help you pinpoint two or three things you could be doing now to turn everything around, and then we're going to share what our coaching program looks like, because I am confident that working with one of our team members is going to be one of the best investments you can make. It's going to get you to where you want to be faster and it's going to finally make it to where budgeting is something that sticks. Thanks for joining us on the Therapy Business Podcast. Be sure to subscribe, leave a review and share it with a practice owner that you may know If your practice needs help getting organized with its finances or just growing your practice. Head to therapybusinesspodcom to learn how we can help.

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Craig Dacy

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