It can be extremely difficult to stick to a budget. Sometimes, an emergency or unexpected expense will come around, and you will have to spend more than you intend. However, if you are regularly going over your budget, you may be committing at least one budget blunder, if not more. According to Gallup, as of 2013, only 32 percent of Americans were preparing a detailed budget each month.
Before you can commit a budget blunder, you have to be following a budget, and it is absolutely important to do so, because budgeting helps you stay on track with your spending and, potentially, save more money for your future. Once you have established an effective budget, you will need to avoid some habits and implement others to have your budget succeed. Here are five budget blunders to avoid.
1. Not setting the correct budget
Regardless of whether you already have a set budget (but it isn’t set correctly) or you are trying to establish a budget, you need to make sure you are setting your budget fairly. There are many budget sheets available for free online, and using one can help you establish, or fix, your budget. After you determine how many bills you have and what they cost you, see how much discretionary money you have left and make sure that you set savings goals, as well.
If you set your budget too low and you can’t afford to save properly or pay your bills, you will be setting yourself up to fail. On the other hand, if you leave too much money for entertainment spending and you don’t save enough, your budget will fail in a different way.