Mistakes you should Avoid during Budgeting

It’s important to remember that budgeting is the key to see the fine line between struggling and well off. For 70% of Americans in 2019 — this is a habit that’s proven to be helpful. (according to Debt.com). For the remaining 30% of Americans — this is a skill that can be painful to partake in but also difficult to implement and turn into a habit. Our belief is that in order to start something a new — you have to identify where you’ve been going wrong.

Below, you’ll find reasons as to why other people either give up on their budgeting habit or don’t get started. It can be a lot of reasons — you’re in college, lots’ of debt, or just getting by. Don’t worry, we’re developing a series to help you. Start here as a starting point, check out how to make it a habit, and our template that should help you. Okay, let’s start:

1. You’re Not Tracking Your Spending

• If you’re like me, you can be bad about tracking their spending habits. It’s essential to understand where your money is going, especially when trying to stick to a budget. You can make goals and wish lists, but without tracking where you are spending your money, your budget won’t be helpful.
• A great place to start is to annotate — what you spend your time on each day into simple categories. Whether it is a small purchase like lunch or a big purchase like a nice bag. Examples could be seen here in our template.

2. You Forget About Fun

• It’s easy to go a bit crazy when first creating a budget. There’s that drive to be perfect and save as much money as possible to meet your goals. Surprise- may have set-up some goals that aren’t completely helpful..
• Try this: Think about the spending categories that are most important to you, and the ones that you find to be most unnecessary. In that process you should be cutting back, tracking what is most hurtful, and making holes for what makes you happy. This way you’re able to organically think about your spending decisions.

3. Not Informing your Family or Partner

• Do you have a partner or children? Make sure you talk about your new budget. You want to share your goals and how you will achieve them with the new budget.
• Keep the conversation flowing about your budget. This way, it can be a team that is leading this. You can both make changes and implement new goals.
• Be cognizant though , you may not agree on the whole budget. Compromise is your best friend — it’s necessary to achieve your savings goal.

4. Forgetting the Emergency Fund

• Life emergencies can happen at any time. A reasonable budget will include funds for these kinds of occurrences.
• Make your emergency savings a top priority. You can put away at least five percent of your income each week. Once you hit a goal of $500, set a new amount to reach.
• Work toward saving up to six months of life savings. This way, in the event you lost your job, you can still cover your bills while job searching.

5. Giving up too Easily

• Of course it’s tempting to want to see results immediately when it comes to your finances.
• Don’t get discouraged and give up. Think of budgeting like starting a new diet. You have a big goal, but you have to take the right and small steps to get there. It can be easy to get frustrated and want to give up.
• Just remember that budgeting takes time, and some tweaking, to get it right. You can’t be expected to be perfect at anything on the first try!
• You’re doing this for you… So don’t give up on yourself!

It’s honestly never too late to start budgeting. If any of these sounds like you , forgive yourself. Trust this writer — everybody has done at least one of these. The key to consistent and smart budgeting is to be realistic and true to yourself. It’s nearly impossible to be good at budgeting without having a couple of mistakes.

The importance of budgeting can be spoken about forever but it narrows down to the principle of being in charge of your financial freedom. Without it — surprises can throw you off, no clue how much you could save, and you waste MORE. By managing your money, understanding your spending habits, and forcing yourself to save. You will feel comfortable enough to start multiplying wealth by Investing. Check out the rest of our series — making it a habit & a budgeting template.