“This year, I’ll finally get my finances in order.”
I said this every January for about ten years. Download Mint, use it for three weeks, forget the password by March. Next January, try again with a different app. Same result.
Only 9% of people finish their New Year’s resolutions. For a long time I assumed that was about willpower. Eventually I realized it was about sequence.
Why Most Budgets Fail in the First Month
The typical approach is to decide you need a budget, then immediately start tracking expenses while also figuring out the tool. You’re trying to build and use the system at the same time.
That’s like assembling furniture while someone’s sitting on it.
The people who keep their budgets long-term do something different. They set aside time to build the system first - review past spending, set up categories, plan the year - and only then start using it. By the time they’re tracking expenses, the system already exists. They’re just filling in numbers.
I tried this three years ago and it actually worked. Pulled up my bank statements from the whole year, and forced myself to look at where the money actually went. Some of it was uncomfortable to see. The subscriptions especially - I had no idea I was paying for that much stuff.
Once I had my annual budgeting planner ready, tracking was easy. Three years later, still using the same spreadsheet.
The Fresh Start Effect
Wharton researchers call it the “fresh start effect” - the motivation spike you feel at the start of a new year, a new month, even a Monday. It’s real. It also fades in about two weeks.
If you spend those two weeks setting up systems instead of using them, you’ve wasted your motivation window.
The fix is simple: do the setup work separately. Whether that’s a weekend afternoon or a few evenings - get the system ready first. Then when motivation kicks in, you can channel it into actual tracking instead of configuration.
Why I Stopped Monthly Budgeting
For years I tried tracking expenses month by month. It never helped much.
The issue is that life doesn’t happen on a monthly schedule. Car insurance comes due every six months. Various subscriptions renew throughout the year on whatever random dates they signed up. Holiday spending shows up regardless of planning. Tax season takes a chunk out of April.
With monthly budgeting, every one of these feels like an emergency because you didn’t see it coming. The whole year becomes reactive - constantly scrambling to cover things that shouldn’t have been surprises.
Annual budgeting works differently. You plan all 12 months upfront, see the whole year at once, then divide it into monthly pieces. That $1,400 insurance bill isn’t a crisis anymore because you’ve been setting aside $230 each month.
69% of Americans are living paycheck to paycheck. I doubt most of them are bad with money - they just don’t have visibility into what’s coming next.
Loud Budgeting
There’s this social media thing now where people say “I can’t go, I’m saving for a house” instead of making up excuses. Being upfront about financial limits instead of pretending everything’s fine.
I like the honesty. Only works if you actually know what your limits are, though.
Why I Built This
I made FinancialAha’s Annual Budgeting Planner because I couldn’t find what I was looking for. Everything out there was either too basic - just expense tracking without any planning - or way too complicated, like accounting software designed for small businesses.
Really I just wanted to see all 12 months on one screen, with categories that made sense for how I actually spend money, and some kind of alert before overspending became a real problem.
Setup takes about 30 minutes. After that you just update it as you go. It has 33+ categories, built-in goal tracking, and automatic alerts when you go over budget. It runs in Google Sheets so you can check it from anywhere.
The Cost of Winging It
The Federal Reserve found that 59% of Americans couldn’t cover a $1,000 emergency expense. That’s a visibility problem more than a discipline problem.
Without a budget, people typically lose $1,500-3,000 a year to things like forgotten subscriptions, late fees, and purchases that seemed small at the time. A $29 spreadsheet that catches even a portion of that pays for itself pretty quickly.
If You Want to Try This
Block 30 minutes this week. Pull up your bank statements from the past year and actually look at where the money went - not what you think happened, what actually happened. Then set up an annual budget with all 12 months visible. Pick a few goals for the year.
Start tracking once the system is ready. Not before.
The Annual Budgeting Planner is a Google Sheets template. One purchase, yours to keep.