Estimated reading time: 4 minutes
Budgeting mistakes are common for many reasons, so financial literacy is extremely important at any age.
Budget, Budget, Budget, yes, the word gets shoved in people’s faces because they work.
What business do you know of that doesn’t work with a budget and is successful?
Only families with children who live in an apartment need to budget, right?
That is wrong, so very wrong and judgemental.
Everyone who wants to reduce debt and save money should use a budget.
Budgeting Mistakes Builds Financial Success
Did you know that many people don’t even know how to budget?
You see, most people don’t talk about finances, let alone chat about where their money is going.
Often, people are either afraid to use a budget or fear they will make too many mistakes.
Try telling my old-school parents about budgeting; their hands will swing.
They want nothing to do with using a budget because they practice what works for them.
They fail to realize that budgeting can help them get better at saving.
The key to consider is that nobody becomes successful by chance.
When we make mistakes, we learn from them and hopefully not make them again.
Whether your plan to start a budget is to get out of debt or stay ahead of the race, don’t linger around the Jones’ pad, as you might be calling on Uncle Jed to bail you out.
Canadian Debt Increasing
In 2011, the Vanier Institute of the Family released data claiming the debt-to-income ratio is a record 150%.
That should be a shocking percentage for everyone and another reason to control our finances.
Seven Budgeting Mistakes To Be Aware Of
- You don’t have a budget- If you are wondering why you can’t get that new toy or why you can’t sleep at night, it’s because you don’t have a budget. Designing a family or personal budget will keep your spending and savings on track.
- You don’t save your receipts– It’s so important to keep all your receipts so you enter this data into your budget binder spreadsheet. If you lose a receipt, tracking the money you spend is difficult.
- You don’t tweak the budget when needed– Regularly, I recommend you go over your budget to see if areas need improving. An example would be your phone bill increasing by $4.00 a month. You need to make these adjustments in the budget for it to balance.
- You don’t use coupons– I believe every household should use coupons. When I see coupons, I see dollar signs. Who walks by cash and says meh, who cares? Even wealthy people, such as the Kardashians, use coupons.
- You don’t Haggle; It’s important to haggle with utility companies, credit card companies, etc. When it’s time to renew, ask for discounts and promotions.
- Call credit card companies and ask them for a lower interest rate, even if it saves you a few monthly dollars.
- You use your Gross Earnings – The biggest mistake, and I’m sure many will agree, is designing your budget using your gross income.
For example, would you try buying an item for $100 cash when you have $80 in your pocket?
Probably not because you’d look like a fool at the cash register.
Your take-home pay from your employer is called your net income or earnings.
You want to use this number when inputting numbers into your Canadian Budget Binder Sheet.
Avoid Repeating Budgeting Mistakes
Well, there you have my Top Seven Budgeting Mistakes, which I trust will help guide you on your financial journey.
We all make budgeting mistakes but to avoid repeating them, fix what’s broken.
Discussion: What other budgeting mistakes have you made that you can share?
Please leave your comments below.
Thanks for stopping by to read,