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The one reason you didn't stick to your christmas budget

The one reason you haven’t stuck to your Christmas budget

Let’s get something straight right off the bat.


I’m not about to tell you off.



Making a budget takes time, effort and often involves asking yourself some difficult questions. It’s really risky because you might unearth something about your spending that you wish you didn’t know so I applaud you for having the balls to give it a go!


Even if you haven’t managed to stick to your Christmas budget, at least you made one!


I don’t keep a regular budget but I did make one about 6 months ago and it turned out that we were spending just over what we had coming in. Uh oh! Fortunately for us it wasn’t an emergency because we have a good amount of savings but we also have a wedding to pay for next year so we had to make some pretty drastic changes!


Wait a sec…


How did you know that you were overspending by making a budget? Isn’t a budget about deciding what you’re going to spend and then sticking to it?


If that’s your idea of a budget, this is what you’re doing:


Weather forecast meme – source:


Let’s look at two budgeting scenarios:


Scenario 1: Budgeting forwards (also known as forecasting)


Budgeting forwards or forecasting involves looking at what you have available to spend in an average month, quarter, year etc. and making decisions in advance to make sure you don’t go over that number.


Here’s an example of a forward looking budget:


Example of a forecasted budget
Example of a forecasted budget


This is what your Christmas budget looked like this year isn’t it? You dutifully went through all the bills, petrol costs and other known outgoings then allocated how you were going to spend the rest of the money. So, why didn’t it work?


Let’s look at budget scenario number 2 (the way I do it):


Scenario 2: The Financial Food Diary


When I know I have a big financial decision to make, take quitting my job to go full time on Wiser Wealthier for example, or when I feel like I don’t have a firm hold on my spending I start making what I like to call a Financial Food Diary.


Just like when you start working with a personal trainer and track your eating, your Financial Food Diary is a list of all of your spending over the previous month or two. It looks a bit like this except I do mine on an excel spreadsheet:


Financial Food Diary Budget
Example of a Financial Food Diary


Making a Financial Food Diary gives you real-life data to base your budgeting decisions on whereas forecasting is pretty much guessing what you’re going to spend the following month.


Your financial food diary helps you to better understand your spending patters and then use next month’s budget to make some changes to your current spending and allocate your money with much more certainty.


This means that your next budget will look something like this:


Known Budget Example
What your budget looks like after a financial food diary


Take another quick look at the Forecasted budget and it will be obvious what’s different.


As well as the numbers being much more specific, the second budget allows for the fact that some costs are known, others aren’t. The unknown costs are still a forecast of sorts but instead of a pure guess they are based on real data.


Here’s what the pros do:


During the coming month you still keep filling out your Financial Food Diary. This means that your next budget will include two month’s worth of real data. All you have to do now is rinse and repeat for a few more months (not forever because there will be trends) and I guarantee you’ll notice a difference.


Spending is uncertain and always will be but by using real data based on your actual spending rather than trying to forecast from scratch you will be making more informed, more realistic budgets in no time.

Who knows, you might even stick to them!



Got a great budgeting tip or an entirely different way of budgeting? Let’s chat in the comments!

6 thoughts on “The one reason you haven’t stuck to your Christmas budget

  1. Top tips Carl! This is exactly where I used to go wrong. Planning it all out for the month and then sat in shock when there was nothing left to save at the end of the month. Now I do my budget after saving has been deducted, that is just not spendable money anymore, if I need more, I need to earn more it’s as simple as that now. Keeping it updated in real time is the only real way you’ll ever stick to a budget, like counting calories!

    1. It seems to be a pretty commmon thing among those starting out with budgeting and in my experience it never works. Taking out the savings first (direct debit I assume?) makes a lot of sense too!

  2. There was me thinking you really loved your pets spending £105 on them per month but now I know it’s a fictitious budget….!!

    This is a really good way of doing the budget. I always do the fixed amounts: rent/council tax etc, but its always those rough, uncertain figures and unexpected amounts that catch me out.

    I also like to say ‘ok, i need to pay off/save x amount’ so that leaves me what is left for flexible funds e.g. food cost…. so I make the payments I need to first and scrimp on other areas where I have flexibility! Any time I have waited past payday to make the debt repayments and the money gets absorbed mysteriously into the rest of the budget!

    Very useful as I’ll be looking into my 2017 budget this week!

    1. Haha I do really love them but that would be a little extreme wouldn’t it!
      It works really well for me and I’ve just started using it with a client too. They have very uncertain spending patterns due to the husband being in the Army so it’s hopefully going to help them to take get a little clearer on where the ‘leftover’ money is going (after bills, food etc).
      Do you budget for a whole year?

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