Budgeting isn’t really that complicated. BUT creating a budget you can actually stick to is HARD. How many times have you decided “today is the day I am going to actually budget” and then like 1-2 weeks in you’re like okay this is NOT working…I’m done. I mean be honest, most of us have been there.
It is easy to just list your income and expenses but that is not a budget. So if that is what you’ve been doing, I get why it isn’t working. Or maybe you’ve downloaded free (or low cost) templates and worksheets but it’s still not working out.
Here are 3 budgeting mistakes I see all the time that maybe you’re making too.
1. No Checking Account Buffer
When you budget per paycheck using a zero-based budget that does not mean you actually end up with $0 in your account. You don’t spend every penny. It just means you allocate every dollar of your paycheck. So how do you still have money in your account? A checking account buffer. The amount will be different for each person but personally I wouldn’t have more than $500 as a buffer because that money could be better used somewhere else. I have around $100-$150 as my buffer but that is also because I have been budgeting for years and truly trust my process. Your checking account buffer shouldn’t really be used unless you forgot about an expense, an unexpected expense popped up that you don’t have a sinking fund for, or your bill was higher than you thought.
2. Not Knowing Your Numbers
I know this seems so simple but it is a mistake so many people make. They guess on what numbers to use for their budget categories instead of using their actual numbers. You should be doing a money audit before you even create a budget (something I cover in detail in my program Flourish FinanciALLI). You should not be using what someone in social media is using for groceries. Your grocery budget should be what you are actually spending on groceries. If you use $300/month for groceries but you actually spend $500, you’ll always be over budget. Maybe you’ll say “oh budgeting doesn’t work for me” but really your budget isn’t realistic.
3. Giving Up Too Soon
It is so easy to get defeated when your budget does not work. When you hear your friend is doing great with their budget so you decide to try their method or template but it just isn’t working for you. There are so many factors that go into budgeting. Are you managing a budget with a partner? Are all of your accounts combined or are some separate? Do you have irregular income? Do you like pen/paper or spreadsheets? In my opinion, simple is best. You don’t need fancy graphs and a million charts (if you want them great but they aren’t for everyone). Try different methods until you find one that works for you. Don’t give up. In my program, Flourish FinanciALLI, I teach budgeting per paycheck because I honestly think it is the best method. BUT there is flexibility with it depending on if you have combined finances, irregular income, or other factors. I make sure that your budget works for YOU.
If you take one thing away from this blog post, it should be this. Your budget will NEVER be perfect. It isn’t supposed to be. It is a living document that changes as you change and as your priorities change. Your budget should be realistic and flexible. You should know how to adjust it without panicking (if not, start with my free private podcast). Anyone who tells you their budget is perfect every month is lying. Don’t give up on budgeting. Seriously, once you figure it out it is life changing!