I haven't always had a budget, but now I do and I could never go back. It helps me stay on track of my financial goals and it lets me see if there is a problem with my spending. It doesn't even take long to do, so I see no reason for me to not have one.[no_toc]
Even though I have a budget now and it's working for me, I have made many budget mistakes in the past, and I have seen many mistakes that others have made as well.
Below are common budget mistakes that you may be making.Related links:
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Not having a budget.
The first budget mistake you may be making is NOT having one! I think pretty much everyone needs a budget. If you have any sort of money problem (spending too much money each month, debt, etc.), then you need to have a budget immediately, because it can and will help you out.
Not keeping track of actual expenses and income.
If you have a budget, then you should always make sure that you are keeping track of your actual expenses and income. You shouldn't just be making up a number of where you think you are.
Instead, gather receipts and analyze transactions from the past month or the past few months when you create your budget.
Creating an unrealistic budget.
The next budget mistake that you may be making is not creating a realistic budget. Your budget needs to be realistic or it simply will not work. Just because you wish that you could spend $300 a month in food, doesn't mean that should be your budget for food. You need to have a realistic number and work towards achieving the actual budget that you want.
Also, your budget should include all of your expenses. Many people forget to include a budget category for their savings and retirement. You should fit this into your budget immediately.
Also, don't forget to include a budget category for miscellaneous or fun spending as well. I'm sure you spend money in these two areas, so you want your budget to be more realistic and include those two categories.
Your budget is for you (and your family), so there is no need to have an unrealistic budget with impossible numbers. It should be realistic so that you know what you are working with.
What budget mistakes have you made in the past?