Why Budgets Don't Work: The Failure to Stop the Money Sieve in the Checkbook

One of the primary reasons that budgets don't work according to the budgeting plan that you so carefully calculated — is that money simply keeps disappearing from your checkbook. You know what I mean. If you've ever looked at the balance in your checkbook and said, "What happened to the money that was in there?" In your mind you remembered how much money was supposed to be there. And now it isn't. So, what happened?

Life happened. Day to day living costs — that drain the money out of the checkbook in dribs and drabs — happened. I call it the money sieve. The money sieve is a series of small expenses that add up to a large amount of money. You know what the sieve looks like: You write a check for $18.00 for car gas. You stop to pick up some milk and write a check for $6.50. You get your hair cut. You pick up the dry cleaning and laundry. You stop at the drugstore and pick up a couple of items. You pick up take-out for the family because there isn't time to cook. You stop at the cash machine, you think, twice. But as you look more carefully, you realized you withdrew money — five times. You pay for a haircut for your child.

The money sieve is the dailyness of your spending life.

This daily, on-going money sieve wrecks havoc with most budgets — it plays an on-going, insidious role in destroying a budget

Specifically, this money sieve causes two problems: First, these expenses create an on-going leaking out of the money that is in the checkbook. This money that is needed to pay the routine and predictable expenses. This money sieve uses the money that is needed to pay bills. So when it comes time to pay the bills, the money isn't there to pay them. It has leaked out to daily spending.

The second problem this money sieve causes, is stress. Both personal stress and couple stress. This stress usually shows itself in the form of blaming. "But where did all the money go?" you ask yourself or you ask your partner. And there is nothing to show for it. The gas and food have been used up. The cash you got at the cash machine is spent. Your child needs another haircut. There simply is nothing to show for this invisible, daily depletion of your money.

So what can be done?

You will want to find a way to make this money sieve a fixed expense in your budget. The way you do this is to first, make a list of all the daily expenditures. ALL of them. All of the little things that you and your family spend money on over the course of a day, a week, a month. Groceries, take-out, restaurants, hair care, car gas, house miscellaneous stuff, cat and dog food, small gifts for friends. You know the list. And set a monthly budget for that list, the entire list.

Secondly, remove these expenses from your bill paying checkbook. You can do this using one of two methods. Both work. Just pick the method that works better for you. Either take the budgeted amount of money out in cash and spend cash for those items. --OR-- you can deposit the budgeted amount of money into a new checking account to be used just for those daily expenditures. Either way will work if you follow one rule: When you are out of cash or your new checkbook is out of money, you can't go to the cash machine or write a check out of the bill paying checkbook. You are done spending until you are budgeted for more money. It will take planning. If you are willing to plan so you can stop the money sieve, your budget can work.