Budgets Don’t Work, But Here’s What Does
Do you experience a sinking feeling of dread whenever your partner opens Yet Another Spreadsheet called “Budget Version 23?” You are not alone. According to Melissa Browne, a financial educator and author (of Budgets Don’t Work–But This Does Fame), failure at budgeting isn’t a flaw in your character. It’s an inherent feature of the system.
Melissa explains that traditional budgets are like fad dieting for money. They feel restrictive and unrealistic, but they eventually fail, leading to spending sprees worse than what was originally budgeted. Budgets are not the only thing that can fail. Here’s the truth. It doesn’t need to be like this.
Why Budgets Can Backfire
Budgets are based on the faulty assumption that we will magically adhere to our plan if we limit our spending. But, Melissa says:
Budgets and diets both fail because they are restrictive. We splurge as soon as the month ends. We go off plan. Budgeting makes us feel guilty, deprived, and doomed to failure.”
Melissa advocates a different philosophy: first, understand your money psychology and then create a system that works in conjunction with rather than against your strengths.
Confident spenders can avoid budget breakdowns if they understand the reasons for which they spend and design tools that reflect this.
There is No One-size-fits-all
You might have used a digital application. You might have a system that involves cash envelopes, calculators, and other gadgets. Melissa says that your money system should fit your nature and not the other way round.
Each of us has our own unique “money type–similar to a personality but for saving, spending, and managing. If someone prefers individual coaching, you wouldn’t recommend group therapy. Why should every budget work for everyone?
Discovering your money type will allow you to find a system that is aligned with your tendencies and not one that is matched up against a rigid model.
What is a “Money type”?
Your money is your personality. Consider financial preferences to be temperament traits.
Trait = You can also see our Example of a Good Way to start
Creator: Loves manifesting goals and motivators, rules, rewards
Worker: Prefers structure, predictability, and logistical control
Warrior: High-spirited and competitive, they may see money as a challenge.
Worrier: Caution, fear, and security are the hallmarks of a cautious, security-driven person
Knowing your type will help you create systems that you won’t dislike:
- The “Creator”, with its gamified savings and goal tracking, thrives.
- The “Worker” may hate spontaneity. They want budgets and scheduled payments.
- Insurance and emergency funds are more important to a “worrier” than investing in risk.
- When faced with challenges, such as competitions or rapid milestones, a “Warrior’ thrives.
Each structure must be tailored to the individual.
Discovering Your Money Type
How do you determine your type?
Consider these questions.
- Are you a bill-payer? Or do you need a friendly reminder to keep track of your bills?
If you dislike them, you might prefer Creator and Warrior. - Do you enjoy gamifying your goals, or do they make you feel stifled?
Love rewards? Creator. Hated tracking? Worrier. - Do you hold back your spending out of fear or proportionate sense?
– Hoarding based on fear: Worrier. Savings based on balance: Workers or Creators. - Do You Spend Impulsively on Splurges–Or Feel Guilt Later?
If you have a system that is not safe, it may be the creator
You can create a system of money that will not lead you to resentment and sabotage once you have identified your style.
Building a Money System that Reflects Your Type
How to turn self-awareness into action.
Creator
- Use visual progress bars + goals
- Add regular “money Joy” envelopes
- Celebrate your micro-savings and automate them
- Combine your financial well-being with mental health rituals
For the worker
- Set up automated bill payment
- Use software for recurring budgeting
- Create a weekly routine for money checks that is consistent
- Avoid apps that are impulsive and distracting
The warrior
- Use challenges to save money: for example, “No Spend” weeks
- Combine short-term and long-term goals
- Track your progress with a leaderboard
- Financial accountability partners
The Worrier
- Build an emergency buffer
- Track and display your insurance information
- Take small steps to build financial confidence
- Budget padding in every category
Your Money System Needs an Upgrade
We are still in a rapidly changing financial landscape. This is especially true if your income or work has changed due to the pandemic. Melissa highlights four money stories you might encounter:
- Fear-hoarding: “I must keep every penny just in case.”
- Spend to cope: I can’t feel the stress, so I will buy another item.
- Paralysis-by-analysis: “There’s too much data–I’m doing nothing.”
- “I’m not good enough”: Self-criticism that freezes you in action.
Each story has its unique approach, but they can all be tailored to your specific money type.
Immediate Steps for Strengthening Your Finances
- Audit of the last three months: income, bills, and outgoings.
- Sort by ‘essential,’ ‘nice to have,’ and ‘negotiable.’
- Stop or cancel subscriptions that are not serving you.
- Redirect windfalls, such as bonuses or stimuli, to:
- Three months of emergency buffer is a good goal.
- Strategic Opportunities (such as low-priced properties or market dips).
5. Balance Your Mindset: It’s OK to Pause Home Buying, but don’t Stop Building Towards it.
Teach Kids Money in Tough Times
You want your children to be financially confident during this time? Bring them along.
- Explain that your budget has changed. “We used to do things four days a week, now it’s just one.”
- Ask for help. “Can you tell us which supermarket has the best prices?” or “Let’s decide which subscription to pause.”
- Encourage your children to make wise choices. “We are saving money for something very important. What should we do first?”
You can help your children learn about budgeting by inviting them to the discussion. They will feel empowered in uncertain times.
Now is the Time to Save for a Home?
Maybe. Melissa points out:
- Save money if you can. It’s a good asset class that could provide long-term gains.
- First, keep your buffer. Three months of savings will ensure that you do not lose momentum if COVID-19 strikes again.
- Markets may change. Prices may fall soon due to economic changes. You can act with a strong buffer.
Why It’s Never Too Late to Start Today
Money shame is real. Many people learned that they were bad with money as children or by watching their parents. But our story begins now.
Melissa says:
It doesn’t matter what has happened in the past. “Today is the day to think. Even though I’m not great with money, let’s still figure it out.
Modeling a new approach to money is especially important if you are a parent.
- Building emotional strength along with financial strength
- Reduce negative stress triggers among the next generation
- Show them that even small actions can beat paralysis
How to Move from Budget Failure to Financial Flow
This 10-step plan will help you rebuild your relationship with money from one of restriction to resonance.
- Identify Your Money Type
- Inventorize your recent expenditure
- Automate essential (bills and buffers, savings)
- Create categories around your type
- Involve the family in the process
- Replace money stories that are not helpful with ones that empower
- Track with flexibility–celebrate small wins
- Clarity and buffers to prepare for COVID insecurity
- If possible, continue saving for future goals
- Review, adapt, repeat quarterly
This road map will help you transition from creating budgets and enforcing them to building a system that supports real, everyday financial life.
Conclusion
Budgets are a failure because they limit us. We want to go beyond them. When you:
- Recognise your unique money brand,
- You can create any system that you want.
- Build buffers to allow for unexpected events.
Then your money won’t be a noose, but a tool that will support your life.
What is the core advice of Melissa Browne? Stop fighting spreadsheets–and start understanding your story. Self-awareness is the key to freedom and security.
