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June 25, 2025 9 mins

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

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Have you been on the budgeting hamster wheel, where
you start budgeting, getoverwhelmed, frustrated and give
up, and then, months later, youtry it again, just for the same
thing to happen?
Well, today I'm going to walkyou through why most budgets
fail and how you can fix it.
My name is Craig and I'm theowner of Daisy Financial
Coaching.
Our team is on a mission tomake your therapy practice

(00:21):
permanently profitable.
If you own a solo or grouppractice, we're here to help you
build a business that createsmore time, makes more money and
serves more people.
This is the Therapy BusinessPodcast.
Now you know the cycle.
I've lived it myself too.

(00:41):
It's where you start making abudget you feel just like really
motivated, you're all about it.
And then a's where you startmaking a budget.
You feel just like reallymotivated, you're all about it.
And then, a couple of weekslater, a month later, you're
totally ignoring it.
Why does this happen?
And, truthfully, it's.
You're not alone If you'refeeling this.
I went through this for years.
Every client who comes to usdeals with this and, honestly,
even to this day, there's monthswhere it can still happen.

(01:02):
There's months where we getoverwhelmed.
There's months where we falloff the wagon and we maybe go a
couple of weeks without trackingour budget and we have to get
back on that train and get itmoving again.
Well, the hardest part is thestarting.
So when you first start, thiscan be an issue of starting and
stopping.
Starting and stopping and it'salmost makes us hate the whole

(01:23):
idea of budgeting.
It makes us throw our hands upand not even want to try it
again.
Well, there's three key reasonsthat budgets fail, why you've
been on this cycle, and I wantto walk you through those so
that we can avoid getting backon this hamster wheel that we're
stuck on and you can finallymake some progress and finally
have a budget that sticks andthat works for you.
Number one is that your budgetsaren't based on reality.

(01:46):
Most people are guessing theirnumbers or, honestly, even worse
, we're going backward trying tofigure out what are we spending
.
So here's the deal.
We're thinking, okay, maybe wespend $400, $500 on groceries,
when in reality we're spendinglike $1,000 on groceries.
Maybe we're going back into ourbank statements and we're

(02:06):
calculating how much are weeating 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 needto be budgeting.
Here's why neither of theseapproaches work.
The guessing your numbersapproach is really just you
trying to pick a number out of ahat and hoping it works, and
then, when it's not enough, weget frustrated, we fall off, we

(02:31):
get overwhelmed, we think thiswhole thing doesn't work.
Or we beat ourselves up, we'resaying man, we are overspending,
we're going over budget, whenin reality 500 bucks maybe
wasn't enough to begin with inthat groceries.
It's kind of like when you aregoing on a diet and you're like
you know what, I'm not going toeat anything.
It's kind of like when you aregoing on a diet and you're like
you know what, I'm not going toeat anything, and maybe for the
first day you're hungry but youmake it through, but after a day
or two it's just not going towork, it's not sustainable.

(02:53):
And so that's what we find withguessing numbers.
Now, a lot of times our instinctis to go back into our bank
statements and to add up totalson what have we been spending.
And here's why these numbersare not necessarily baked in
reality.
It's because you weren'ttracking, we were just spending
without a plan, we were spendingreactively, we were not in the

(03:14):
mood to cook or we forgot tothaw 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 reallyneed.
So the way to fix this is whatI tell people is to sit down and
really think about what is it?
What do we think it costs tofeed our family?
Let's say you go out to you knowpretty let's.

(03:34):
Let's use restaurants, forexample.
You know what it costs for yourfamily to go out to eat to a
restaurant.
For us, let's just say for youit's like 50 bucks, right, every
time you go.
On average it's 50, dependingon the restaurant you're going
to, depending on how many kidsyou got.
If it's 50 and you're going,okay, what would be reasonable
amount for us to go out to eatevery week?
Let's say twice, okay, so twicea week.

(03:55):
That's a hundred dollars a week.
Four hundred dollars a month iswhat we're going to budget for
restaurants, maybe 500, if youwant to round it up a little bit
and then try that, approach itwith curiosity and see how it
works.
And that leads us to the secondreason why budgets fail is
they're too rigid.
We're not approaching thesethings with curiosity.
We're not just beingopen-minded and flexible, it's

(04:16):
the.
We've set $500 for groceriesand if we don't achieve it then
we're failures.
And this doesn't work when inreality life happens.
We need to create space for that.
Your car breaks down, a friendinvites you to go out to eat,
the kids get sick, or they havea sporting event or
registrations, or they need 10dozen cupcakes for a bake sale

(04:36):
at school.
Whatever it is, life happens.
That we can't necessarily planfor exactly as it is when the
month starts is not realisticeither.
So your budget should move withyou, it should be fluid, it
should have some room for error.
Kind of going back to thatexample in the restaurants how I
said twice a week is $50, $100a week, so 400.

(04:59):
And then I said maybe we shouldround it up to 500.
That leaves space, becausethere might be a week or two
where you go out to eat a thirdtime, or again a friend invites
you out, or you totally burn thedinner and you're like we need
to order a pizza to get thesekids fed to school night,
whatever.
So giving yourself thatbreathing room to to move a

(05:20):
little bit without feeling likeyou've made a mistake.
Now, a lot of times, ourreaction to this is we're trying
to pay off debt or we're tryingto build our savings, we're
trying to get our spending undercontrol and we're told we
should not be spending any morethan what we plan and we need to
be really regimented.
However, when life does happen,or when we're denying ourselves

(05:41):
too much or we're not creatingthat flexibility, it can lead to
burnout, and that's what cancause us to give up on the
budgeting thing, to fail, tojust say whatever and throw it
out the window.
The third reason that budgetsdon't succeed is that there's no
clear goal behind them.
So maybe budgeting in itself isnot that exciting.

(06:02):
It's not motivating.
You have to have a reason why.
Again, going back to, let's sayyou're going on a diet cutting
calories and giving up sugar andgiving up foods.
Back to, let's say you're goingon a diet cutting calories and
giving up sugar and giving upfoods you love.
Who's going to do that unlessthey have a reason behind it?
Whether it's you're trying tofit into a suit, or whether it's
you're trying to get healthier,get your cholesterol down,

(06:23):
you're trying to combat somehealth issues.
Whatever that reason is,there's a deeper reason behind
simply going on a diet.
Budgeting is the same.
What is your deeper reason?
What are we trying toaccomplish?
What are you wanting life tolook like?
What are you hoping to achieve?
Are you trying to pay down debt?
Are you trying to createbreathing room?
Are you hoping that you can goon more vacations or spend money

(06:45):
on the things you want to spendit on?
This is the deeper why, and wewant to get in touch with it, so
that when budgeting is hard,when things derail, when things
go off the hinges, we don't justthrow it out, because when
things get tough, if we're justbudgeting for the sake of
budgeting, we're not going to doit.
If we're budgeting because of adeeper rooted issue, when

(07:06):
things get tough, we're gonnastick with it, because that
thing is so important to us thatit's not as simple as just
throw this budget out the windowbecause it just didn't work
this month.
Budgets don't fail becauseyou're bad with money.
I'm a firm believer thateveryone is good with money.
Now, maybe you've struggledwith it to this point, but you
can be good with money.
You're just not there yet,maybe.

(07:27):
And but you can be good withmoney.
You're just not there yet,maybe.
That's okay.
It takes work.
None of us are born with theinnate ability to budget and
manage funds.
Money is emotional, it's tiedto a lot of different things,
and so it's reasonable for us tohave emotional reactions, for
us to struggle with managing itin a way that is most cost
effective.
Now, because you're not bornwith those innate abilities, a

(07:49):
lot of people need some help andguidance in making this a
system that sticks and helpsthem keep to it.
So, while those three key orthree reasons are the biggest
reasons people fail on budgeting, a lot of times it's deeper
than that.
A lot of times you needaccountability, you need
guidance, you need someone tohelp you find the path around a
lot of those hurdles and get youthere faster and make this

(08:11):
something that sticks completely.
That's what our team of coachesdoes.
So in the description below isa link to schedule a free
consultation with our teammembers.
They're going to get to knowyou what you're trying to do,
help you pinpoint two or threethings you could be doing now to
turn everything around, andthen we're going to share what
our coaching program looks like,because I am confident that
working with one of our teammembers is going to be one of

(08:34):
the best investments you canmake.
It's going to get you to whereyou want to be faster and it's
going to finally make it towhere budgeting is something
that sticks.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview and share it with a
practice owner that you may knowIf your practice needs help
getting organized with itsfinances or just growing your
practice.

(08:54):
Head to therapybusinesspodcomto learn how we can help.
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