Nuggets of wisdom to help you manage your budget

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How to Avoid These 6 Common Budget Mistakes

common-budget-mistakes

Are you ready to manage your money better? Whether you are working on your first budget or are a budgeting master, let me help you avoid the 6 most common budget mistakes.

Guessing on your expenses

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Most things are trial and error when first starting out. Give yourself grace and learn from your mistakes.

Playing the guessing game is never a good plan when you are trying to be proactive with your finances. Avoid this common budget mistake by knowing the concise monthly amounts on expenses. This sets you up for success as you can more accurately plan for the month or year ahead.

Although it’s understandable to make educated guesses when you are first creating a budget, try your hardest to make accurate guesses. The more accurate your numbers, the more success you will have with your monthly budget and staying on track to make those little and BIG money wins.

Unrealistic expectations

Unrealistic expectations can set you up for failure. It goes without saying that a family of 4 can not live on $20 a week for groceries. When creating a budget, set realistic expectations! 

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Setting realistic expectations for your budget helps you stay on track and motivated.

Unrealistic expectations set you up for failure because you will feel like you are always losing! Review your past bank statements before creating a budget. By doing this, you will have an idea of how much you spend on a certain category each month. 

Instead of budgeting $20 a week for your family of 4, you will have a better understanding that your groceries will cost between $80-$120 per week.

Setting realistic expectations gives you a better chance of winning with your money.

Being Inconsistent

Another common budget mistake is being inconsistent. Consistency is key to achieving any goal. Without consistency error creep in.

Are you tracking some weeks? 

Not tracking for a few days? 

Do you make a budget one month and then skip the next 2 months?

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Consistency is key to success. Being consistent with your expense tracking will create a habit.

Inconsistency makes budgeting tricky. Trying to go back after making a purchase and account for that expense weeks later causes erratic tracking. 

Sometimes it’s hard to remember what the purchase was even though you’re seeing the charge.

You might even lose a sense of how much you spend each month on regular expenses. It makes it hard to stay motivated when you are not being consistent.

I like to pick a day each month to go over our next monthly budget and get everything ready before the next month starts. 

By having time set aside to sit down and look at the numbers, I have a sense of control. This motivates me to stay consistent before the month even begins.

Not tracking expenses

This is a big one. Much like being inconsistent, not track your expenses will make it hard to win with your money.

If you are not tracking your expenses at all, how will you know where you stand with your expenses? How will you know how much money you have left to spend for the month?

This is a big budget mistake. You need to have a starting point, as well as the ability to see what you have left at any given time. 

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Which monthly expenses have you paid so far?

Guys, if I’m being completely honest with you, I struggle in this area around the holidays!

Yes, we have a set amount put aside for Christmas shopping and gifts, but we get so busy that I’ll forget to track our expenses for a week! Trying to go back after the fact and figure out where we spent money and why gets complicated.

Don’t be like me (Hi! Becky here! 👋🏻) during the holidays. Do yourself a favor and track your expenses regularly to avoid the confusion later.

Forgetting to save

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Invest in yourself. Remember to pay yourself first. You will reap the rewards later.

This is another area I occasionally struggle in. Saving should be one of the first things anyone does with their money each month. 

By saving, you are paying yourself and not others! I know what it’s like to wrestle with the idea of wanting to pay debt off faster by not saving money, aside from a little emergency fund. 

However, make sure you include a line to save money. No matter how you pay off your debt, save money each month, even if it’s only $50! You will thank yourself later!

Like Robert Kiyosaki says in Rich Dad Poor Dad, “always pay yourself first!”

Think of all the money you will lose out on if you are not saving each month. It should be a top priority to avoid this common budget mistake!

Living above your means

I know it’s hard not to get sucked into “keeping up with the Joneses”. You see your neighbor’s pull up to their driveway in a new car. Perhaps your high school friend makes a post about their new home. Your coworker is going on yet ANOTHER cruise with her husband next month.

I know you want to live those lives! We all do. But don’t make this common budget mistake. Not everyone is as happy as they seem once they are behind closed doors.

Yes, some of those people truly have money and they have worked hard to get where they are. They deserve that new Mercedes Benz. 

Still, many people do not have the kind of money they are spending. They live a life behind maxed out credit cards and fear of how they will pay their bills next month.

Is that really the life you want to live?

Let me paint you a picture. 

live-your-best-life
Live your best life by learning how to happily live within your means!

It’s fall. The leaves are just starting to change colors. You are driving your dream car down a picturesque neighborhood road with trees lining both sides. You pull into the driveway of a beautiful 2-story house with that wrap-around porch you always wanted as a child.

The garage door opens to reveal 2 kayaks for those lovely Sunday morning paddles. You walk into the home to find a gorgeous kitchen with a giant island where 2 plane tickets await you alongside a cruise pamphlet with a picture of Bora Bora on the front. 

You are going on a cruise in October with your husband, fully paid for.

Oh and that dream car you were driving? It’s also fully paid for!

Don’t forget the kayaks. You guessed it! Paid for with cash.

Can you feel your stress melting away? Zero worries about expenses. Planning vacations that you pay for in cash. Driving your car knowing you don’t owe a dime on it.

This could be your life. Live YOUR best life!

If you buckle down and stick to a budget that works for YOUR money and not your neighbor or coworker’s, you could be debt free in the next year or two!

You could save up for the new home of your dreams. Pay cash for that dream car! Go on a cruise with your honey and STILL pay your bills!!!

Live within your means. Have you heard the phrase, “more money, more problems”? Well, if you SPEND more money and don’t get on a plan, you will also have more problems. ESPECIALLY if you don’t truly have the money!

Money doesn’t buy you happiness. Living a life within your means will though! 

Stop trying to compete. Keep your eyes in your own lane. 

Comparison is a thief of joy! We all have so much to be thankful for, but we allow ourselves to get distracted by the nicer things around us.

It’s time for you to win with your finances!

Stop guessing how much you are going to spend, start setting realistic expectations for your money, strive to be consistent, set reminders to track your expenses, always pay yourself first by saving money from each paycheck and live within your means!

You have already taken a step in the right direction by finding ways to manage your money. Take another step in the right direction by escaping the hold of these 6 common budget mistakes.

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