5 Budgeting Mistakes that Could Sink You

Today we have a guest post for you from Jeanne at Everything Finance.

Everyone starts learning about money from a young age. Perhaps you ask your father for money to buy a piece of gum at the store. He hands over some change, you pay the cashier, and she gives you the bubblegum.

When we are older, our wants and needs grow larger than a simple piece of bubblegum, however, and they cost more too. In order to pay the bills we must get jobs and learn how to budget.

But the fact is that some of us are more diligent about budgeting than others. In addition, even when you are a religious budgeter, there are still 5 budgeting mistakes that could sink you.

1. Lack of Accuracy

As you create your very first budget you may have trouble deciding what categories you need and how much they should be. If you use the wrong figures it is one of the budgeting mistakes that could sink you.

In the last few months if you have been making rent payments, buying groceries, and paying other bills you are already part of the way toward creating an accurate budget. Take the last three or four months of spending for each area and average them.

Or, if you are just moving out of your parent’s house and into your own place, use your bills for the next couple of months to get an average for each category. Once you know these figures you should be able to set up a budget.

2. Being Too Strict

It’s easy to say you are going to stick to your budget no matter what. If your budget is too strict, though, you may be guaranteeing your own failure. That is another one of the budgeting mistakes that could sink you.

Life is short not to get some enjoyment out of it. Restricting yourself in such a way that you suck all of the fun out of life makes you wonder what the point is. In addition, you may be more likely to blow your budget.

An occasional indulgence is ok as long as you plan for it. Make sure you give your budget a little wiggle room so you can stay on track with your spending each month.

3. Spending Without Tracking

Spending with no thought or tracking is just the opposite of being too strict. If you are doing this then a budget isn’t helping you.

You must track what you have spent in order to know when you will be out of money. You can do this with budgeting software, paper and a pen, or a simple spreadsheet on a computer. After you begin tracking your spending you will be on your way to budgeting.

4. Forgetting to Add Items

Sometimes people simply forget items in their budgets. Common items that get missed are things like yearly taxes, haircuts, doctor bills, and gifts among others.

Not planning for these expenses is another one of the many budgeting mistakes that could sink you financially. Once you identify these items and their frequency, divide the cost per year by twelve and add them to your monthly budget.

5. Lack of Communication

If you aren’t communicating well with your spouse or partner your budget could be headed for trouble.  Each person in the relationship must have their basic needs provided for along with some wants. To reach this goal you must be clear about these items and their costs.

The consequences of not talking about money and budgeting when it is needed could cause overspending and resentment at the least. Conversely, by working on your budget together you can avoid overspending.

Managing money is a learned skill that is not always clear-cut or easy. But as you can see there are ways of avoiding these budgeting mistakes that could sink you.

What are some of the budgeting mistakes you have made in the past?

Jeanne is a married mother of 2 grown children who works a full time job, has two side hustles, and also helps out occasionally on the farm she and her husband own together. Her background is finance and medical office management, and she hopes to help others improve their finances and change their futures.