Five Budgeting Pitfalls to Avoid

by Joe Plemon on July 20, 2009

revised laptop case
Creative Commons License photo credit: shastared

This post is the first of four posts of a series on budgeting. The third installment will be a guest post on Being Frugal on Wednesday, so be sure to check it out!

BUDGET DIDN’T WORK? TRY TRY AGAIN.

I know. I know. You have tried budgeting and it didn’t work and you gave up. Join the club. So “Why,” you are thinking, “would I want to try again?” The answer is simple. You will never achieve financial success unless you manage your money. You have a choice: to meander through life with a hazy lost feeling or to take control and experience the peace of knowing you have a plan. Try writing down your short term and long term financial goals. Then ask yourself, “How will I achieve these goals?” You will intuitively know the answer: you must tell your money what to do and you can’t do that unless you have a functioning budget.

Remember: your budget, because it helps you live a life of financial peace, is your friend, not your task master.

I challenge you to give it a new try. Millions of people successfully manage their money and you can too. Just avoid these pitfalls and you can win with your money:

1. Leaving things out of your budget.

Many people try the yellow lined pad, write down what they think of at the moment, and expect it to work. Budgets need to include EVERYTHING, including an appropriate amount of “blow money”. Why? Because in real life we really do blow money.

2. Overcomplicating your budget.

Computer nerds: listen up. A workable budget isn’t a 10 page excel spreadsheet that you deliver from the mountain like Charlton Heston in “The Ten Commandments”. A workable budget needs to be simple.

3. You don’t actually do it.

Some people talk about budgeting and think about budgeting but never actually get paper and pencil out and write one.  It’s time to stop making excuses on starting your budget.

4. You don’t actually live on it.

A common mistake is to write a budget, put it in a drawer and not actually follow it. Here is the deal: you control the budget, but once it is complete, it controls you until you decide to change it. How will you know if it works if you don’t actually follow it?

5. You don’t give yourself enough time.

When it doesn’t work after one month, don’t give up. You are normal. These things take time. Allow at least three months before your budget on paper reflects reality. Even then, you will need to fine tune those numbers on a regular basis.

Don’t give up because of past failures. You work hard for your money and it should work hard for you. Get up, dust yourself off and try again!

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