Do you often update your budget?
Do you even have a budget?
Perhaps when it comes to spending, you don’t have a plan and you simply “wing it” and assume that you’re making more than you spend, whether that comes in the form of simply paying bills or buying what you want rather than need.
Let’s start with that over or under estimating your spending. If you aren’t sure what you’re spending on or, even worse, how much you’re spending, then you need to adjust that immediately and that starts with a budget.
That budget also should consist of a plan to save money for the future or for expenses that might be the unexpected, such as taxes that need paid, home repairs or something else of that ilk.
The real issue that most face and one of the more common mistakes is not really looking at money in the purest sense or buying as though you have all the money in the world. Think about the car you own; did you buy it based on the money you have or the car you want? If it’s the latter, you’ve likely overspent on a car that is much loved, but the monthly payment hardly is the same.
Overspending isn’t just about not budgeting but also not looking in more unique places to get what you want, more specifically buying used when that is perfectly acceptable and must less expensive.
The first thought in that school of thought is car, but what about your home?
Far too many who struggle with money buy too much home, and that isn’t to suggest they don’t need the three bedrooms or extra living space in the basement, but more about the monthly mortgage payment and the overall cost of the house.
The common phrase “house poor” is all too familiar in that your mortgage takes up more than half of your monthly income, a sure fire no-no in the world of budgeting and saving money.
Finally, money isn’t just the root of all evil but it also is something you like to pretend you have even if you don’t. Not having money just means your budget looks different than that of your friends, so trying to buy the same wardrobe, the same car or the same vacation plans is only going to put you further behind in your plans for financial success and freedom.
Making mistakes with your budget is nothing new. The trick is figuring out what you’re doing wrong and adjusting it before mistakes start to feel like commonplace.