You might be proud of yourself for finally taking the time to put together a budget, but did you do it the right way?
Take a moment to check and see if you’ve made some of the most common budgeting mistakes.
Not Saving Enough for Emergencies
One of the biggest budgeting mistakes that people make is not setting aside enough money for when an emergency happens.
You never think you’ll really need it, until you do. You should make building your emergency fund a priority, and experts recommend that you set aside six weeks of your usual take-home pay.
Not Tracking Your Spending
You’d be surprised at how quickly the little things can add up. Taking the time to track your spending can help you keep your budgeting priorities in check.
When you’re able to see first-hand how much you’re spending on those everyday not-so-necessities, it’ll be easier for you to cut down on those expenses.
Not Allowing for Any Fun
While saving up money is important, it’s equally as important to also budget for a little fun. You should literally make “fun” one of the line items when you’re putting your budget together.
It’s okay to start small. The biggest thing is that you make sure that you’re allowing yourself to enjoy things beyond your budget.
Not Adding Any Wiggle Room
You’ll want to allow room to breathe in your budget. If you budget for every little nickel and dime, you’re only going to stress yourself out.
Add a line item that represents between 5-10% of your budget that allows for wiggle room. You can use this money you’ve saved later to help pay for other expenses, emergency funds, or for your ‘fun’ allowance.
Not Checking for Errors
You don’t want your budget to be composed of guesswork. Don’t guess at how much money you’ll need to set aside for each line item. Take the time to figure it out completely so you aren’t hit with any surprises later on.
Set aside a single hour of your time and go through all of your monthly expenses and make sure that you’re noting them down correctly. It’s worth the extra effort.
Not Talking Finances With Your Spouse
Sometimes when people put together a budget, they forget to discuss it with their spouse or significant other. You should be having frequent conversations about your financial goals to make sure you’re both on the same page.
It’s okay if you don’t completely agree with those goals. What’s important is that you take the time to discuss them and allow for compromise.