A budget can be a helpful tool to manage your spending and to save for your future. Avoid these budget slip ups to give yourself the best chance at a successful budget.
- Not Allowing For Non-Recurring Expenses – The most commonly overlooked expenses are the ones that do not recur monthly. Items like property taxes and yearly renewals are usually forgotten in budgets; be sure you are including all expenses that you have year round to get an accurate budget.
- Not Planning For Emergencies – Emergencies are unexpected by nature and when budgeting you have to be able to plan for the unexpected and keep money aside as a cushion. Not saving money for unplanned expenses will only make it harder for you to stay on budget. Try looking at your past unexpected expenses and see what they cost you, take the average and plan to save that amount to cover these costs.
- Not Planning For “What If” Scenarios – Part of your budget should include expenses for the extended future and having enough life insurance for your family’s continued support. Make sure you know how much coverage you need and make room in your budget to put the policy in place.
- Not Tracking Your Actual Expenses – Having a budget can be a helpful tool when used properly, which means comparing your actual expenses to the budgeted figures. If you don’t track your actual expenses you won’t know whether you are staying on budget or not. Monthly, you should compare your actual expenses to your budget to stay on track.