If you are struggling to stay in budget, you may be making some of these common budget mistakes. The biggest budget error you can make is to NOT have a budget! So, I am going to assume that you have one, or an outline of a budget. The concept of budgeting is pretty simple: Create a plan for your money and stick to it. This list will help you to stick with your budget, and evaluate the mistakes you may be making.
Everyone goes off track sometimes, that is a given. The mistake is to ignore when this happens. We all make budget mistakes so don’t beat yourself up when you do. You have to take a look at what made you go off track, learn from it, and adjust. Tracking your income and your spending is not budgeting. It is simply a good record designed to help you see where you are spending your money and how much is coming in.
Don’t forget to budget your cash. Most budgeting software or online help will organize your bank accounts and bills. One big error people make is forgetting to budget their cash spending, as well. Even if you just write it down as you go, keep track of what you are spending in cash. You may find you blow a lot more money than you realize, just because it isn’t being accounted for in your check register each month. Dave Ramsey’s book The Total Money Makeover often suggest you use a cash envelope system for paying all bills. This is a great way to really see where your money is going.
A mistake most of us make is setting a budget for a week or a month. You really need to make your budget out for the whole year. This gives you some leeway to make adjustments throughout the entire year. We all know that things change constantly, so having an annual budget will make it easier to fine tune along the way. You will update monthly as new bills come in and budget changes occur, but the overall budget will be laid out for long-term use. I also like to use a simple budget calendar or day planner to help keep on top of bills and expenses week to week. I can plan out for the entire year at once, then simply add new things as they occur.
Don’t make unrealistic goals to be frugal. It is always smart to save money and get the most for your money, but be reasonable when you set some of these goals. You might use coupons and I am hoping everyone does but don’t expect to be like the ‘Extreme’ people on television. Do plan on shopping realistically at the store to help your family stay within your budgeting goals set each week. Don’t give up everything overnight, simply make small changes gradually for long term success instead of major budget mistakes.
Savings do count. It is a mistake to not allow funds from each paycheck to go into your savings. I know this can be difficult if you are on a tight budget, but even a modest savings goal is better than none at all. I really like the weekly savings plan, where you put it in $1 the first week, $2 the second week, and so on. Do whatever works best for you.
The last budget mistake you could be making is to not allow ‘fun’ money in your budget. It is not realistic to not have money in your budget for fun or entertainment. We all need to take a break sometimes and do something just for fun. You don’t have to break the bank to have a good time, but figure out what you and your family like to do, and make sure to add that money into your budget expenses.
As you are reviewing your finances, take a look at these little budget mistakes that could be getting in your way. Tackle one or all of these, and you can eliminate some simple budget mistakes that get in the way of your budget success.