Are You Making These Budget Mistakes?

Watch my full YouTube video on this topic here!

It might seem basic, but a well-planned budget is the cornerstone of any solid financial foundation.  A budget is a roadmap that helps you track your income and expenses and make informed decisions about where your money goes each month. 

Here are 3 common mistakes people make when it comes to budgeting that you can avoid:

1.     Underestimating your expenses:  many people often underestimate their expenses, leading to overspending and financial stress.  It's essential to include all of your monthly expenses, including recurring bills such as rent/mortgage, utilities, transportation, groceries, and entertainment, in your budget. This will help you see where your money is going and identify areas that are running your budget over each month.

2.    Forgetting to update your budget: it’s important to review your budget every few months and see if anything needs updating.  This is especially true when inflation is on the rise!  Also check to see if you’ve had any new monthly expenses come up that you need to add to your budget, such as childcare, pet expenses, or a new membership/subscription.

3.    Forgetting to save: in the long term, it’s incredibly important to make sure you remember to save for the future.  All too often, people focus solely on paying bills and expenses each month, without prioritizing the future. It’s important to make saving a priority in your budget, even if it’s just a small amount each month.  Building an emergency fund and saving for retirement are critical to achieving long-term financial stability and security. If you're struggling with this, consider automating your savings so they are done for you each month.

If your budget accurately reflects all your monthly expenses, you update it regularly, and you make sure to including savings as an important category, you’re well on your way to avoiding three of the most common budgeting mistakes!