On the road to successful budgeting there may be some hiccups. Mistakes are inevitable, the key to building a successful budget is sticking with it. Overcoming these common mistakes will get you on the road to a successful budget! Here are 7 common mistakes that we make when trying to get on a budget…
1. Trying to Go Too Hard at First
When setting up the budget, slow and steady wins the race! People often fail because they are trying to do too many things at once. I am guilty of this in a lot of areas of life. I learned the hard way that creating a budget, and actually being successful at it is a process. You cannot just cannon ball into budgeting and think it will be successful. Try to think of it like a diet change, or some other lifestyle change. Make small changes consistently and you will see the results you want.
2. Going in With the Wrong Mindset
Most people associate budgeting with some kind of deprivation of things, money or experiences. Changing the idea of a budget to yourself is the most important thing you can do for yourself. Your mindset around money and the idea of having a budget can be the one thing that changes the game for you. A budget is not to stop you from living your best life. It is a way to document your spending to ensure that your money is working for you. When we get on the road to financial freedom we have to know why we are going through this. We have to understand the ‘why’ for it to make sense and be plausible.
3. Being Too Dramatic
Along with going too hard, we have to be realistic with our budget. Cutting back on the wants is easier to do then trying to cut things out completely, in the beginning. Setting limits is more effective than cutting things out altogether. The road to a successful budget is taken in bite size chunks! Keeping it easy to digest, is what can make it doable. Learn to cut back, not cut out!
4. Lack an Emergency Fund
Emergencies are inevitable. Being unprepared is major budget buster. It is important to consider those unexpected expenses in the budget. Better prepared then caught in a situation with no wiggle room. Without any contingency in the budget, its hard to recover from an emergency. Saving is another word that has this stigma. We have to sabotage and be ready for the things we know the world will throw at us.
5. Don’t Review and Revise
You can’t just set the budget and forget it. Many of us make the mistake of creating a one size fits all budget, that doesn’t work! No two months are the same. Though set expenses may not change, those variable expenses tend to fluctuate month to month. It is important to review the past, and make the adjustments going forward. The budget will change as the expenses change.
6. Not Accounting for ALL of the Variable Expenses
This is a common mistake when creating a budget. However, those variable expenses are what make or break the budget. It is important to take the time to list out all expenses and create a line item for them in the budget. This is an easy way for the money to get away from you without even realizing what happened. There are many things that we pay for monthly that do not fall into the typical “bill” categories.
7. Stop Trying
Budgets require work, if you experience a set back on the road to budgeting bliss, you can’t give up. Be diligent. The effort involved in budgeting will be returned in peace of mind. Many fail because they think once they have the budget set and they deviate its over. It is important to try and try again until you find your groove.
Now that you are more familiar with the regular mistakes that we make when setting up the budget, we can avoid these things! The good thing about making mistakes is that they are lessons. We can take these mistakes and we can turn them into budget wins!
What are some mistakes that you have come across when trying to budget?