For the first 20 years of my marriage, we never had a budget. I didn't even really keep a register for my checking account. Last year, after several bounced checks and a very messed up checking account, I decided to create a budget. I also changed banks. The last year has been FABULOUS! I know what we have coming in and I know where our money goes. AND we have money for all of our expenses!
The people who have their budgets intact are far and few between. If you are one of those people who cringe when they hear the word budget, you are not alone. While budgeting is not the most fun you might ever have, it is a necessary part of life and finances.
There are several ways to manage your budget, and there are several mistakes that many people make. Once you are aware of these budget busters, then it is that much easier to create and maintain a healthy budget once and for all.
Relying on Future Events
How many times have you found yourself relying on that promised raise or that end-of-year bonus and gone out and spent the money “as if” you already had it in your hand?
This is one of the biggest mistakes made in the world of budgeting – to rely on future events or income to support a "buy it now" impulse or attitude.
It is always best to wait to get that money in your hand before you go out and spend it.
Not Keeping Careful Records
This has to be the second biggest mistake in budgeting. Most people are so busy running from one event to the other and always multi-tasking that they forget about careful record keeping when it comes to their budgets.
Misplacing a receipt or not logging a purchase or expense onto your spreadsheet can mean disaster for your end-of-month budget. There will most certainly be more money spent than you have - all because you did not keep careful records.
Not Saving Money at All
As the old saying goes, it is very important to pay yourself first. Even if it is a few dollars a paycheck, at the end of the year that little bit of savings can add up to a lot of money for holiday, shopping and presents.
If you are consistently diligent about saving money, you will be surprised at how those savings can mean the difference between having a vacation and a retirement account or not. No matter how much money you do or do not have, it is very important to create saving as a habit. Good habits are just as easy to keep as bad ones.
If you feel that you do not have enough money to possibly save, start looking where you can cut down. Not buying that expensive coffee, washing and drying your own clothes rather than going to the dry cleaners, and buying goods off-season are all excellent ways to save some money.
By avoiding these common mistakes, your budget will become much easier to manage.
We have not bounced any checks in the last year and our account has been positive all year. A budget really did make a difference for us. Try it, you might like it too!
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