Common Budgeting Mistakes

Sticking to your budget can be challenging, but it is much easier if you avoid these pitfalls.


1. Using credit to make ends meet
If people find that their expenses exceed their income, they 
should be finding ways to make their expenses fit their budget. Instead, they sometimes use credit cards to pay for items they really can't afford. Remember, when you use a credit card, you are borrowing to make that purchase – and borrowing comes at a cost. Frequent and excessive use of credit and credit cards for normal living expenses like gas and groceries is a sign that your income is not enough to cover your expenses. Other than emergencies, credit cards should only be used when you already have money in your bank account to cover the charges.

2. Not keeping track of your expenses
Tracking expenses is a major component of the budgeting process. Tracking your expenses will reveal overspending and help you to stay focused on your budgeting goals.

3. Not including savings in your budget
Savings should be treated as a priority, just as you would consider a mortgage or a car note. We suggest that you establish an emergency fund equal to 3-6 months of living expenses, as well as another savings account to use for other expenses.

4. Borrowing from one category to fund another
If you exhaust all of the money you allotted for one category, it is important not to borrow from another category. For example, using money from your grocery fund to pay for concert tickets you have not saved for will lead to higher credit card balances.

5. Putting yourself in tempting situations
If you know that you have a hard time resisting certain purchases, avoid putting yourself in tempting situations. For example, if you know that you have exhausted your clothing budget for the month, don’t go to the mall. If you overspend on work lunches, pack your lunch. If you can’t afford a Florida vacation, plan something local and stick to the plan.

6. Not communicating with your spouse
In order for a budget to work, all family members must communicate and not hide any spending.

If you can stick your plan and avoid these budgeting pitfalls, you'll be well on your way to regaining control of your finances and living within your means.