I’ve had my fair share of budgeting mistakes. Every time I made a mistake, it made me think about giving up. But giving up on my budget would only set me back further from my financial goals.
Instead, I found relief knowing that other people were making the same mistakes as I did on their personal financial journey. Perhaps you’ve experienced the same mistakes at some point and can relate to what I’m about to share.
Here are the most common budgeting mistakes I’ve made.
Table of Contents
- Too Vague
- Missing Consecutive Days
- Made It Too Hard For Myself
- Budgets Aren’t Important
- Put Myself Down During The Process
- Never Changing The Budget
- Guilty Spending
- Giving Up Too Soon
Too Vague
In the beginning of my budgeting journey, I would categorize certain transactions in a way that made it difficult for me to figure out later when I sat down to figure out where all my spending was going.
For example, if I ate lunch with my family, I would input it as “Lunch” instead of writing down the exact place we ate at. This would cause confusion because the $10 expense and $60 expense both shared the same description. There was no definite way of knowing where those costs came from.
Knowing where we incurred those costs made a huge difference when calculating our family budget because we could see exactly what places were causing us to overspend. Going back to the dining out example, venturing out for ice cream during the Summer months made sense but we knew those visits would drop off once the climate came cooler. The same can be said for cold months and ramen. We knew that we wouldn’t eat ramen as much throughout the entire year as we would during Winter.
The more detailed our budget was, the better it was for uncovering our financial faults. This helped us think of creative ways to battle those so we wouldn’t succumb to lifestyle purchases. We made it a point to be more aware of our spending which came from being more detailed with our budget.
Missing Consecutive Days
When life would get busy, keeping track of my budget would take the back-burner. I wouldn’t make time to update my budget because there were higher priorities consuming my time. Having to juggle between a full-time job, being a father, attending our children’s events, and making sure we were living comfortably, it’s obvious why I’d miss tracking our budget.
A missed day of tracking our budget would repeat itself multiple days and before I knew it, I’d have an entire week of zero updates. There’d be nothing to look back at, no historical data, just a blank week of spending.
This made budgeting impossible to figure out so the best option to consistently track it was to create a habit. The habit didn’t have to be difficult either. It just needed to be done in a way where it was simple for me to do. For me, I had to update our spending no more than 2 days after the money was spent. If it went longer than that, I’d have a hard time doing it.
Once I stuck with updating the budget in that manner, I eventually pushed to doing it immediately after I’d spent the money or at least before the end of the night. This approach made sticking to a budget much simpler in the midst of a busy lifestyle.
Made It Too Hard For Myself
This mistake comes from missing too many consecutive days with my budget. Even though I knew there was value from having one, keeping up with it was too hard because I didn’t have a simple approach. I’d update my budget whenever I felt like it or not at all.
There was no system to how I kept track of my bills, receipts, or statements. They would be piled altogether and I’d get to them when I felt like it. This style would create more work for me later which backfired. When I saw how much I needed to update, I’d go back to just living life.
It’s ironic that by taking the easy road with my budget, I was actually making it way harder for me. If I made it laborious, it created more roadblocks to break down. In order for me to stick to the budget, it needed to be simple and easy to follow.
Budgets Aren’t Important
Budgets weren’t treated with the right importance early in my life. I read about them in my early 20’s and how they helped normal people stay on track but it never dawned at me that I could achieve the same result.
Now that I’m much older than those days, I’ve realized the importance sticking to a budget has had on my life. Compared to my younger years, I’m in a much better place today than I was back then. I was living paycheck to paycheck which made sense because I didn’t pay any attention to where my money was going. It was basically, money in and money out.
I will say that the importance of budgets are personal to the person. A budget is not for everyone because everyone has a different perspective on their finances. But for me, having a well thought out budget and following it is helping my family inch closer to our financial goals and pay down our debt.
Put Myself Down During The Process
When I finally began following a system to track each expense in my budget, it became clear to me that I was “failing” in various spending categories. Coming to the realization was tough but to make matters worse, I would put myself down during that time as well.
Following a budget was meant for this exact reason, to show me where I needed help. I had no idea how poor my spending habits were until I decided to follow a budget. Up until that point, I spent my money whenever I felt like it.
It wasn’t until I recognized the value having a budget gave me did I change my way of thinking. The budget wasn’t meant to penalize me. The budget was created so that I had a means of identifying my bad spending behaviors and correcting them.
Never Changing The Budget
As my lifestyle changed, I should have altered my budget to meet that reality. Instead, I attempted to keep my budget the exact same as it was when we had one child or before she decided to become a full-time stay at home mother.
Those were a few of the drastic changes we went through as a family but a budget doesn’t need to be altered during extreme measures. Even when we added a few kids’ sports to the equation, I forced us to live within extreme means in other areas. This caused grief, headache, and continuous arguing between Mrs. Simple FI and I because she couldn’t understand why I was putting us through that.
Fortunately, I eased up on the gas for my sanity and my family’s happiness. After changing our budget to match our additional expenses, it made it easier for us to adjust to. I wasn’t forcing anyone to live in an extreme way because it was all part of our budget.
Guilty Spending
It’s difficult to pinpoint the exact areas to fix in your budget when first starting out. There comes a time when aiming for perfection is more important than the goal. When I didn’t meet the perfect standard – set by me – I resorted to spending on guilty pleasures.
These costs weren’t the most expensive items because by this time I’d gotten away from them. The items I looked to purchase were cheap dessert, Starbucks coffee, and (the guiltiest one of them all) sushi. These were my go-to items for a quick pick-me-up when I spent poorly.
This bad habit continues to creep into my budget today but not because I’m doing poorly. It has more to do with the cushion I have included into my budget for guilt-free spending when I can’t resist those cravings.
Giving Up Too Soon
I’ve fallen victim to not seeing the results I want, as quickly as I wanted. Pair this with any one of the mistakes listed above and I had a recipe for failure. It wasn’t a failure of having a budget but more like a failure to recognize what the budget was actually doing for me.
A budget doesn’t fix everything from day one. It took me a while to understand that. With that being said, following a budget gave me insight to my habits. Sometimes they were very obvious like my craving for sushi. Other times, they weren’t as crystal clear. For example, during weekends when our kids had sporting events were the peaks of our dining budget. I assumed we weren’t spending much until I actually looked at our budget.
It can be easy to throw in the towel and give up but this shouldn’t be a reason to quit. Anything to change my financial state is worth trying. Think of a budget like working out. You don’t gain muscle mass in a week. Instead you take baby steps toward your ultimate goal, stick with it long enough, and eventually you reap the results.
Conclusion
Perhaps you’ve experienced these mistakes, or others, that can hamper you from giving your budget a 100% try. Like anything new or beneficial, it takes time for the results to appear. After reading some of my common budget mistakes, hopefully you don’t feel that you’re alone on this financial journey. Many people make mistakes with their budget, even those who blog about personal finance.
Have you made any of these mistakes? What mistake gives you the most trouble?