Common Budgeting Mistakes
- May 30, 2017
- By: Greenpath Financial Wellness
Sticking to your budget is easier if you avoid these budgeting mistakes.
#1 Using Credit to Make Ends Meet
If you spend more than your income, you should cut back. Don’t use credit cards to pay for items you can’t afford. When you use a credit card, you are borrowing money. That comes at a cost. Credit cards should only be used when you already have money in your bank account.
#2 Not Keeping Track of Your Expenses
Tracking expenses is a major part of the budgeting process. Tracking your expenses will reveal overspending. This will help you to stay focused on your goals.
#3 Not including savings in your budget
Savings are a priority. You should pay yourself each month, just as you would your house or car payment. We suggest you create an emergency fund equal to 3-6 months of living expenses.
#4 Borrowing From One Category to Fund Another
If you spend all of the money in one category, don’t borrow from another category. For example, don’t use money from your grocery fund to pay for concert tickets if you don’t have enough saved for them.
#5 Tempting Situations
Avoid tempting situations. If you have spent 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 trip, plan something local and stick to your budget.
#6 Not Communicating With Your Spouse
In order for a budget to work, all family members must communicate and not hide any spending. Communicate as honestly as you can with your partner and your children about budgeting, spending and money.
Stick to your plan and avoid these pitfalls. You’ll be well on your way to controlling your finances!