We’ll be covering the 5 budgeting mistakes that you’re making. Whether these mistakes occur on a daily basis or a monthly; they can be holding your budgeting efforts down. Check if you are doing any of these below, then make a change to correct it.
1. Making Your Budget Too Strict
Too strict of a budget is a common mistake that we see when evaluating people’s budgets. You should be having fun by saving some extra money; the strictness will take away the fun factor. In addition to too strict of a budget not being entertaining; unexpected things happen. If your budget is too strict, it will not allow for extra unexpected additions to your expenses.
2. Failing to set a proper budget
We made a big deal about your budget not being too strict; however you will still need some basic structure in your budget. The fundamental idea of a budget is to hit a certain goal within a time frame. Not creating a sound budget in the first place is most definitely the number on mistake you can make.
If you do not set a budget in the first place, are you really budgeting? You’d just be wasting thousands of dollars without even noticing. The importance of budgets is generally unknown in most households; that is why we teach about it so strongly here. By setting a proper budget, you’d be able to do things like live in an RV.
3. Same exact budget every month
It is natural for each month to come with its own events and struggles. You cannot always predict what your budget will need to be like say 3 months from now. The same exact budget every month will be a pitfall. Don’t make the same mistake that others make. At the beginning of every month, make a budget for the specific month. You’ll regret it if you don’t.
4. Not preparing for the really bad stuff
Life will happen. You need to be prepared for the unexpected. Start preparing for the really bad stuff. Even if nothing happens, you’ll have an emergency fund that offers another layer of relief. If you start budgeting today, creating an emergency fund should be your number one priority. This can cover unexpected payments, being fired, etc.
You need to remember the basic fact that bad things will happen to good people. This is because bad things happen to all people. Financially, you need to be prepared for events like these. They may seem difficult at first but as soon as you get a solid emergency fund going, you’re golden.
5. Failing to Budget Your Time
The fifth and final mistake that people make is failing to budget their time. Time is our number on resource. We can earn money, but we cannot earn time. So budget your time effectively, you can do so much with it.