Managing your household budget can be challenging at times. Sometimes it might seem like you have to miss out on the little luxuries in life to pay the bills. However, it could be simply that you’re falling into some of the many budgeting mistakes everyone makes from time to time. Handle your money management better by avoiding these 10 budgeting pitfalls.
1. Not writing a budget
It’s overly optimistic to believe you can remember all your bills and expenses every month. Write your budget details down or use a computer to keep a digital record.
2. Not looking at bank statements
It’s easy to forget the smaller expenses, so check your monthly bank statements. You might even notice payments you don’t need to make anymore, such as unwanted subscriptions. Talk to your community bank about the best way to access your bank statements.
3. Saving too much
Saving is great, especially when you have specific goals. However, if your monthly savings goal is unrealistic, you will definitely dip into those savings to pay bills and then feel like you’ve failed. Only save what you can genuinely afford.
4. Not saving enough
Conversely, if you have goals such as saving for a deposit or a holiday, saving at least a little every month will gradually get you closer to these goals.
5. Only counting recurring bills
Nearly everyone has one-off or unexpected expenses. Don’t forget to add that car tune-up or school trip to this month’s expenses.
6. Leaving no margin for emergencies
A budget where every penny is accounted for looks very satisfying on paper. However, that leaves no additional funds for those inevitable emergencies. Ensure you leave some spare money for unforeseen circumstances.
7. Not putting money aside for fun
From date night out to dinner to making sure you can buy your favorite magazine each month, little luxuries are important.
8. Forgetting credit card spending
Cash users are 82% more likely to remember what they bought and how much it cost. Track all your credit card expenses and log them into your budget.
9. Not addressing problematic expenses
Whether it’s grocery shopping, power bills, or clothes that are racking up the biggest spend, assess each one and see if you can realistically reduce it a little every month.
10. Giving up after one failed budget
Don’t get discouraged if you’ve run your budget as well as you know how but still end up in the red at the end of the month. Money management gets easier with practice. Talk to your hometown bank about budgeting advice or recheck your bank statements for expenses you may have missed.
Managing your budget is the best way to get your finances in order and ensure you have a bit of extra cash to enjoy life. Bookmark this page and come back to it whenever you need help with your household’s budget.