Is It a Budgeting Problem or an Income Problem? (And What Can You Do?)

When money feels tight, it’s easy to assume you just need to “budget better.” However, there are times where no matter how carefully you track your spending, there’s simply not enough coming in to cover the basics.

Then the real question becomes: Are you facing a budgeting problem, or an income problem? Knowing the difference can help you take the right next step toward financial peace and less stress.

Signs It’s a Budgeting Problem

A budgeting problem usually shows up when the numbers could work—but habits, choices, or lack of a plan keep things feeling messy. Some signs of this are:

• You’re not sure where your money goes each month.

• You often overspend in certain categories (like dining out, drinks with friends, Amazon orders, or subscriptions).

• You have enough income to cover essentials, but you’re not setting aside savings or paying down debt consistently.

• Your using the credit card often and the balance is growing, even though there is money in the bank.

The Fix:

• Create a clear budget (zero-based or 50/30/20 can be a great start).

• Track your expenses for at least one month—awareness is half the battle. If this seems too overwhelming, just try tracking for 1 week. This will give you a very good idea of what is happening without too much stress.

• Identify small leaks (unused subscriptions, impulse buys, poor planning for birthdays, weddings, etc.) and redirect that money toward priorities.

Signs It’s an Income Problem

An income problem happens when you simply don’t earn enough to meet your needs—even if you budget perfectly. Some signs of this are:

• Your fixed expenses (rent/mortgage, utilities, groceries, insurance, transportation) already take up most or all of your income. This can happen very easily in places like Southern California where many folks rent or mortgages are extremely high.

• You’re cutting back everywhere possible, but still coming up short.

• You rely on credit cards, side jobs, or loans just to cover basics.

• Or worse, your playing the credit card shuffle game and just barely making those minimum payments each month while the balance is growing and growing. (I've been there and know that game well! I got myself out of it and you can too!)

The Fix:

• Explore ways to increase income: negotiating a raise, adding a side hustle, upskilling, or changing careers.

• Sometimes, it is not about changing careers, but maybe companies. Are you a high performer but work with a company that hasn't provided raises or promotional opportunities? It might be time to start looking at other companies where you will be valued more while doing the same work.

• Revisit fixed costs—sometimes downsizing housing or refinancing debt makes a huge impact. This sometimes means a move either physically or with your mortgage company.

• Pair an income boost with a realistic budget so new dollars don’t disappear. This is especially true if you have recently had a bump in pay! Keep spending low so that the increase in pay can help you catch up and be in a better financial position in the months, years to come.

  
  

When It’s Both

For many people, the answer is a mix of both—spending habits and limited income. That’s okay! The goal isn’t perfection, it’s progress. Start by creating clarity around where your money goes. From there, you can decide whether to adjust spending, earn more, or both.

The Bottom Line

If you’re struggling financially, it doesn’t always mean you’re “bad with money.” Sometimes it’s a budgeting problem. Sometimes it’s an income problem. And sometimes, it’s a little of both. The good news? You can do something about it—whether that’s building a stronger budget, making more money, or getting support to sort it all out.

💡 Not sure which one you’re facing or where to start? Let’s figure it out together. Schedule a free 15-minute Q&A call with me to see how financial coaching can help you get clarity and start moving forward with confidence.

👉 Book Your Free Call Here