If you’re like me budgeting can be a tough thing especially if you are a beginner. I can’t tell you how many times I’ve quit and made mistakes with my budget. Over time I’ve learned a thing or two that has lead to the demise of my budget.
In this article I’m going to pull out all the stops and share the 7 deadly sins I’ve come to know that will ruin a budget, and hopefully this article will give those of you who are just getting started or who have been running a budget for some time to avoid.
So let’s get this started.
1. Getting To Complicated
One of the biggest problems I faced for years was making my budget way more complicated than it needed to be. Typically for me things would start out by using a spreadsheet to manage things and before I knew it I would add so much stuff that it would take 2 hours just to review it.
Quick Tip: Consider using an online program such as Mint.com. Programs like this one are designed to import all of your financial info into one spot which can make things a lot easier to manage.
I’m sure spreadsheets work for some people but I’ve found that the work I had to put into keeping my budget going the more likely I will fail at it.
2. Not Getting Specific Enough
Another thing I’ve learned over the last several months of starting a budget is that the more specific you can be with your budget the more you will learn from your finances. In my case I’ve learned where my highest spending areas are, where I’m doing great at, and even which bills are costing me the most each month.
From here it allows me to look for ways to cut down on my spending. For example, I recently noticed that my cable was going up on average of $1 to $2 a month, and over a years time that can really add up.
This resulted in me giving my cable company the cancel call and getting my bill lowered, by $25 a month and locking my bill in for 12 months.
3. Not Reviewing Your Budget Enough
I also learned that reviewing your budget often can make a big difference as well. Since my family and I live on a fairly tight budget, it is it makes sense that I would review my budget at least on a weekly basis.
However in the past I use to do it once pure month but what I found was that I would end up blowing my budget every single month. Now I know this may not be the case for everyone but if you are someone on a very tight budget I recommend reviewing it at least once per week.
Quick Tip: If you have a smartphone consider using the Mint.com app to help you stay on budget when you’re on the go. I personal like to use this app when I’m grocery shopping.
4. Not Making Changes
When it comes to your budget it needs to be fluid, meaning it’s meant to change and evolve over time. This might mean adding new budgets, adjusting how much you want to budget for a given item, or even deleting certain budgets altogether.
A good way to do this is to look at trends over time. A lot of times we may not notice some of the things we are spending money on as much until you look at things over a longer period of time.
Quick Tip: Mint.com has a trends feature and allows you to look at things over a given period of time. On top of that it will also tell you what you spend on average for a given item.
5. Not Being Honest With Your Budget
One of the worst things you can do with your budget is not to be totally honest with yourself. In other words denying that something is really happen. For example, you may be in the red each month of your budget by a few hundred dollars and deny the fact that you need to fix something.
This type of behavior can often be fatal to your finances when it comes to your budget. Denying these facts can cause all sorts of problems from adding up more debt, to marital issues, to bankruptcy.
6. Not Making Things Fast
Speed is also another factor that can destroy your budget as well. If it takes you 3 hours to get your budget done their is a good chance you won’t stick with it. The best way to manage a budget is to keep things as fast a possible.
In a recent article I wrote about how I review my budget on a weekly basis, I mentioned that it only takes me around 20 minutes a week to review my budget and see how I’m doing on my budget.
So ask yourself the same question, how long does it take for you to review your budget? If you can’t do it in the same amount of time you may need to change something to improve this.
7. Bringing Anger Into The Situation
Finally, the last thing you never want to do is bring anger or any other heavy weighted emotion into the situation. Now I can tell you from my experience that I’ve definitely had my fair share of high emotions with my finances.
However what I’ve learned over time is that when you approach a situation with a high emotional state we tend to make poor intelligent decisions. On the other hand when we are in a high intelligent state of mind we tend to make a better choices and decisions.
A good example of this saying something you didn’t mean when you were upset at someone. I know I’ve done this but once I take the time to cool my jets and think things through I realize there’s always a solution to every problem.
Have you ever fallen for any of these deadly budgeting issues?
We’ve fallen for a few of these with our budget. I think a huge key is finding what works for you, make it personal and go from there. Way too many fail at budgeting because they don’t make it applicable to their lives.
I agree John. In my case I knew that spread sheets just were not going to work for me and that’s when someone told me about Mint and I’ve been hooked since.
I think when people make a budget too complicate they are just going to trash it or hate budgeting. I think keeping it simple and to the point is important. If there is certain data someone wants they can easily add it in. I designed my own excel budget spreadsheet and it has exactly what we need on it but it’s not too complicated at all.
Great stuff, Chris. Numbers 3 and 4 have been huge for us. Every month we review our budget and find another way to cut stuff out. This month, we dropped some extras on our phone bill and saved $12 a month. Like you said, it all adds up!
Right on Mr. CBB. I’ve also heard your budget spreadsheet is pretty awesome. I may have to check it out when I get a chance.
You are right about that Laurie. Every little bit counts when it comes to saving money. I actually would like to cut our LAN line but my wife wants to keep it, but I think we will get rid of it at some point because that what I see most people doing.
Great reminder to not make it too complicated. My problem is that I get so motivated one day and will spend a lot of time on it and then won’t feel like spending that much time again for another month. Need to remember to keep it simple!
I think getting to complicated was my biggest issue when it came to putting a budget together as well. I think that’s because I’m a numbers guy and I always like to know the numbers of something and before I know I have so much info in front of me it literally makes my head spin. Thanks for the comment Janine.