Most people I know WANT to budget. They want to succeed desperately. But they don’t. I’m gonna share some of the most common budgeting mistakes we all make, and why they blow our budget success.
I mentioned in the story behind Made Frank that I am so excited to move forward in becoming a resource for your real lives. And that starts today.
I have a little passion I’m gonna share with you. I actually love to talk about budgeting.
Very tantalizing, I know. But I consistently get requests for budgeting advice, and I feel strongly about the value of it to leading a well managed life.
Now, I’m going to make an assumption here that if you are reading this, you are at least somewhat interested in the concept of budgeting. And ‘tis the season, right? It’s the time of year that people want to get their life together, so to speak. Getting a handle on our finances, and setting and maintaining a budget are usually some of the hottest topics.
We are long-term “budgeters,” and with that comes a lot of successes…and many, many failures. Perhaps, learning experiences is a better way to describe it. Because it’s about growth, not perfection, right?
Today is not the day for nuts and bolts. Instead, I want to share the big lessons I have learned and the real life mistakes people make when trying to get on a budget.
The Biggest and Most Common Mistakes When Trying to Set and Stay on a Budget
#1 You don’t know your patterns.
We all have them. They are our rhythms and routines for spending money. They are backed by data. Our own data. Our financial upbringings can affect them as well as ingrained habits and personality.
We all usually have good and bad ones. It’s important to know both. When we don’t know our patterns or spending habits, we have no shot at setting a budget that is realistic and sustainable.
Do you know where you spend money the most freely?
Where is it hard for you to part with money?
Where do you feel guilty when you think of how you spend your money?
Are you a spender or a saver?
Do you spend money when you are sad?
Do you spend money you don’t have?
How do you handle credit cards?
Are you prone to overdraw your bank accounts?
There are many ways these patterns play out in our spending. You have to get to know yours.
#2 You set your budget too vague.
Why is this a crucial budgeting mistake?
Quite simply, you’ll miss things that “blow the budget.” Categories you forget about that are necessary. Yearly expenses you don’t plan ahead for. There are lots of roadblocks to successful budgeting that happen with too vague of a budget.
#3 Your budget is too complicated.
I’ll be honest. We have a very detailed budget. But we have been on a budget for 12 years. We kinda know what we are doing and what we can handle. However, having a budget full of minutiae instead of some broader categories, is one easy way to give up on budgeting. This can be the counter problem of #2.
The other way to overcomplicate your budget is the systems you use and the ways you maintain it. Too many steps, or a complex digital program that you aren’t ready for, is a sure fire way to give up before you get the chance to make budgeting a lifestyle.
#4 You don’t have any accountability.
According to Gretchen Rubin in The Four Tendencies, most of the population falls into the category of “obligers.” Obligers are people who need external motivation and accountability to change their behaviors or habits. I am an obliger. The seasons where I have really had trouble with sticking to a budget is when Bret is not involved in some way.
Sometimes we have to get creative with accountability in this area. If you are single or have a spouse who isn’t interested in participating, getting a trusted friend involved with specific markers and check-in plans, is one of the best ways to have accountability for sticking to your budget.
#5 You are using systems that don’t fit your personality.
This is where things like using digital systems vs. old school analog come in to play. Or how you break down your categories. I have lots of experience with both of these and can’t wait to share those with you.
#6 You think you make too much money or too little money to need a budget.
Not sure I have to clarify much on this one. I would just like to argue that you are wrong. You need to know where your money goes. It’s responsible and it’s wise. And then someday, when perhaps something catastrophic happens to your finances, or suddenly you have large amounts of income, you know how to adjust and keep moving forward with your life.
#7 You don’t have any blow money built into your budget.
Ha. Still makes me laugh. We still call it blow money.
There are seasons this might be an amount so small it feels comical. But knowing you have even the tiniest bit of freedom is like fresh wind for your motivation to stick to your budget.
#8 You aren’t honest with yourself.
This is the number one, most common mistake people I give budgeting counsel to, make. Here’s reality…
It’s embarrassing to admit how much you spend on certain things. Where you do your emotional spending. Maybe you were never taught about how to manage your finances. Maybe you have large amounts of debt.
I get it. I really do. This is hard stuff. There is often guilt and shame wrapped up in how we handle our money. Dave Ramsey, budgeting guru says, “We often overspend because we are trying to fill an emotional gap in our lives. No object will ever satisfy your soul.”
Well said. And painful. But very true.
If you can’t be honest, even when it’s embarrassing, emotional, or hard, you will not stick to a budget.
It’s not possible.
Starting, planning, maintaining, and following through with a budget is just hard. It is. But take it from someone who knows what financial life feels like on and off the horse. It’s so worth the effort. The reward is immense.
I hope this has been helpful, and I can’t wait to keep diving into this topic over time. I have much to say. And now I’m curious, do you fall into any of these common budgeting mistakes? I’d love to know where you struggle the most so we can get to work together!