Common Budgeting Mistakes people make:-

Regardless of whether you're saving for a new house, planning a family vacation, or preparing for an emergency, learning how to manage your money can help you feel in control of your finances, and keep you on track towards your goals. But, knowing what to do and actually doing it are two totally different things. And many people encounter the same issues when trying to manage their money wisely.

If you are making any of these 7 typical budgeting errors, learn how to avoid them in next month's budget so that you can retake control of your spending


1) Keep a track on your Credit Score

Are you not writing your budget down? This is one of the biggest budgeting mistakes people make. Not writing your budget down is something that can cost you money. While it may seem like a good idea not to write your budget down, you may think that a written budget takes too much time. No matter how well you think you can budget in your head, there's always going to be an expense you forget about. I know making a budget isn't fun, but continuing to live paycheck to paycheck isn't fun either.

Setting an unrealistic budget

Why do people set unrealistic budgets? Sometimes we set unrealistic budgets because we want to feel better about ourselves. The key to sticking to your budget is to make it realistic. If you try to budget X Amount per month for groceries to feed a family of four, you're going to fail.

Set yourself up for success by creating a budget that's tailored to your lifestyle. This will add more room to your budget, making it feel easier to stay on track and stick to your plan.

Forgetting to track your spending

It’s easy to forget to track your spending when you’re on a budget since budgeting is the process of knowing how much money you have coming in, how much you have gone out, and whether you are left with enough to cover your needs. If you are wondering, “How do I track my spending?” the answer is that you need a spreadsheet. A spreadsheet is a way to remember and track your spending.

New to budgeting? If you're new to budgeting, it may be hard to set spending amounts for your monthly expense categories. Instead, just track your spending for the first month. This will give you an idea of how much to budget for the second month.

Forgetting to budget for seasonal and one-time expenses

Why do people set unrealistic budgets? Sometimes we set unrealistic budgets because we want to feel better about ourselves. The key to sticking to your budget is to make it realistic. If you try to budget X Amount per month for groceries to feed a family of four, you're going to fail. Set yourself up for success by creating a budget that's tailored to your lifestyle. This will add more room to your budget, making it feel easier to stay on track and stick to your plan.


PRO TIP: To budget for large annual expenses, you can divide the amount you need to pay by 12 and set aside this money each month.


Forgetting to budget some “fun money”:

You’ve got a better handle on your debt and an emergency fund in place, which are two major steps toward a financially secure future. But what about some “fun money” for when you want to splurge on an unnecessary purchase or treat yourself to a nice dinner? Just like you budget for basic living expenses like housing, food and transportation, you should also budget for fun money — money you set aside for the things you want but don't really need, such as leisure activities and entertainment.


The best part of having fun money is you don't know what you're going to buy with it yet. This is your money to spend as you wish, without guilt.


The bottom line:.

Celebrate what you have accomplished, it could be buying your favourite ice-cream when you accomplish. Budgeting doesn’t always mean saving but also celebrating in a mediocre and affordable manner.