5 Budgeting Mistakes and How to Avoid Them

Budgeting can be tricky. Budgeting doesn’t come naturally to most people. As kids, we typically get birthday money and spend it. We weren’t taught to save, or “spend wisely”. So when we’re thrown into it as adults, it isn’t always easy.

If you’re not used to making a budget each month, you may find yourself struggling to create one, let alone stick to it. But whether you are a beginner or veteran budgeter you can still make mistakes! As you’re getting started with a budget, you’ll want to avoid these 5 budgeting mistakes. 

Estimating how much you spend without any real numbers

When you make your budget, it can sometimes be hard to figure out how much you should put in each category. While it’s okay to strive for a $300 grocery budget, if you are currently spending well over $1,000, this is not realistic.

Solution: Take a look at your bank statements and credit card statements and average your last few months together. This will give you hard numbers you can use to make your budget.

Not tracking your spending

It’s not enough to simply make a budget, you need to know how much you’re able to spend! You won’t ever know if you’ve managed to stay within your budget parameters unless you have some idea of how much you’re spending.

Solution: Sign up for a service such as You Need a Budget or Mint to track your spending. If you don’t like apps, create a spreadsheet and manually enter the information.

Using the same budget every single month

Depending on your lifestyle, you may need to adjust your budget each month to fit your financial goals. Things will change and you will need to accommodate different things in your budget. Using the same budget each month can keep you from reaching your goals and end up making it hard to stick to in the end.

Solution: Sit down at the end of each month and make your budget for the following month.

Not saving for big expenses

Car registration, Christmas, and vacations don’t exactly pop up out of nowhere. Yet, if you don’t save up for these expenses, you could find yourself without the money to pay for them! You may not be able to know when you will need to change your tires, but you can start saving for it now to help reduce the panic later!

Solution: Set a deadline for when you need to have the money by and then divide that number by the number of months you have to get there. Set aside this amount of money each month so you can start saving for larger expenses.

Not adding some fun into your budget

If your budget is too strict, you will not want to follow it. There needs to be some flexibility to do something fun or you will likely find yourself blowing your budget because you need to be able to have some fun.

Solution: Start small and add a mere $10 of fun into your budget if it’s all you can afford. Increase this as you’re able to or until you find a number that works well for your lifestyle and your budget.

Sign up for our One Week Budget Challenge

Are you tired of always stressing about money? Are you tired of wondering whether or not you have enough money in your bank account to pay the bills? If you are finally ready to transform your finances and stay on budget, then you will love our One Week Budget Challenge! In this challenge, we go over everything from how to create a budget to how to get your finances under control.