OK, so the title may be a bit over-dramatic but there are some really common and easy to make mistakes that lots of us make with our budgets and I wonder how many of them you can identify with?
Here’s my seven deadly sins of budgeting….
Not actually having a budget written down.
It’s hard to stick to your budget if you don’t actually know what your budget is so it’s always worth taking the time to calculate what your budget is and then revisiting it every few months to make sure it’s still working for you. There’s a handy guide here on how to work out your budget as well as a free printable budget planner here.
Not including everything. And I mean everything.
Unless you write down ALL of your outgoings honestly then you don’t know where you need to cut back. When you first work out what your budget is then you need to include everything from the regular Costa you get on your way home from shopping (me) to the energy drinks that you know you’ll buy when you start work early on a morning (Mr Frugal). You need to include things like pocket money (Miss Frugal) and anything you pay for regular clubs like football (Master Frugal). Only then do you get an honest picture of what you’re spending so you can decide that you need to cut out that Chai latte that you used to treat yourself to each week because just one drink a week was costing around £170 a year! If you genuinely can’t see where your money is going, keep a spending diary for a month.
Not accounting for ‘fun’ money.
You need to make sure that you do allow some money for treats and fun though. I might have given up my weekly Costa but I still treat myself every now and again. I gave it up because I realised it was more of a habit than anything else and I didn’t want to be spending £170 a year on something that I bought just for the sake of it – now I treat myself when I fancy one and not just because I’m shopping and it’s Friday. We always have a portion of our budget set aside for treats – making memories and having fun as a family is the main reason we’re frugal in other areas so this is important to us. You may choose not to have as much money set aside as we do but do try and make some room in your budget for fun.
Forgetting to budget for special occasions.
Things like Birthdays and Christmas come around every year so there’s no excuse for not being prepared. J Even putting a small amount aside each month will make these occasions more affordable when they come around.
Not having an emergency fund (no matter how small).
What will you do if the car breaks down or you need an emergency repair doing around the house? Try to put a little bit aside for an emergency fund so you don’t have to find money urgently if you need it.
Not being realistic.
No matter how determined you are, it’s unlike that you can reduce your shopping budget by half in one go so if you currently spend £500 a month then you’re unlikely to reduce that to £250. If you’re budget is unrealistic then you’re probably not going to stick to it which will not only have a knock on effect to the rest of your budget, it’s also demoralising. Be honest with yourself and by all means take steps to reduce outgoings where you can but make sure your budget is realistic. You can always adjust it whenever you need to if you do manage to shave some money off your outgoings.
Not taking into account the non-essentials.
Things like haircuts, shoes, clothes and anything else that you might need to buy should be planned for in your budget.
A budget is brilliant, but only if you’re honest with yourself.
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