Keeping a budget is one of the most effective ways to save money and be more mindful about your spending. However, there are budgeting mistakes that you may be making that are hindering your saving progress. Once you stop these errors, you will notice you have more money to work with each month.
Read on to find out four common budgeting mistakes to avoid if you want to stop being broke!
Not considering all expenses
There are so many things for us to spend our money on each month. For families, the list is even longer. The purpose of a budget is to plan for these expenses. When you fail to include them all in your budget, the amount of money in your back account will never align with what you think you will have after all of your bills and necessary expenses (groceries, gas, etc).
Combat this by keeping receipts for a month or two. Record anything you regularly spend money on, and fit it into the budget somewhere to cut out the expense altogether. Also, you need to take in to account expenses that aren’t paid on a monthly basis, but perhaps on a quarterly or yearly basis.
Getting behind on tracking
If you are trying to follow a budget, you must stay on top of the tracking, especially for your expenses. The longer you let it sit not updated, the more difficult it will be to sort it all out when you finally do sit down and update it.
To prevent this mistake, set aside time at least one day a week to keep the budget updated. Make it easy on yourself by assigning the same day each week, such as Sunday evening.
Not being honest with your spending
It’s easy to buy that $3 coffee every other day, when you think just a few bucks won’t hurt the budget. However, these little expenses will add up and cause you to have less to put into savings – or for other expense categories.
For a budget to work as well as it can, you must account for every expense. If you love your coffee, simply allocate $15 each week to it. Being more honest about every single penny you spend will make it easier to save in the long run.
Shuffling money to cover other expenses
If you have segregated your income into different categories, the money should only be used for those items. Spending more on eating out by taking a bit of cash from the car repairs expense category may seem harmless. However, if you are hit with an unexpected vehicle issue a week later, you may have wished you hadn’t done that extra order of Chinese takeout!
BONUS TIP: My friend Sadie over at Slap Dash Mom recently spoke about how she “found” money by combing through her accounts and canceling many autopay subscriptions for things she didn’t really need or use anymore. I highly recommend you do this, particularly if you’re looking to see where money is tight. For instance, do you really need both Hulu and Netflix?
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