People don’t budget for a variety of reasons. Excuses for not having a budget range from not knowing how to do it to thinking there is more than enough money. The truth is, if you don’t budget, it’s costing you. Here are 5 money mistakes that having a budget will help you avoid.
Spending Without a Plan
Even though I really like to budget, there have been times when a paycheck has come in, and I have just gone out and started spending before I made my budget. Every time I have spent before I planned I have come up short. Dave Ramsey describes the budgeting process as “on paper, on purpose.” There is no doubt that you will spend way more than you want to if you don’t have a plan. To avoid making this mistake, write out your budget before the money comes in. Know where the money is going to go and you won’t end up with a lot of month and a little money.
If you’re spending your money without thinking about it, you will never have anything left over to save. You’ve probably heard the saying to “pay yourself first.” Well, when you budget, it’s easy to do this because you are planning it out. It’s going to be virtually impossible to make your savings account grow without a budget.
Getting Unnecessary Debt
Going right along with spending without a plan is getting into more debt than you need to. If you don’t budget, you will be tempted to use a credit card to make up the shortfall you will have when you spend more than you make. The easiest way to live within your means is to write out and then stick to your budget.
Not Knowing What Your Expenses Are
If you’re not budgeting, you won’t have a good idea of what your expenses are. For example, recently I was writing my monthly budget and knew I had to pay upfront for four months of club wrestling for my son. This is not a normal expense, but I was able to look at the budget and see other areas I could cut to pay for this expense. Budgeting helps you know what your expenses are and gives you a chance to move your money around so everything gets paid.
Paying Late Fees
You want to keep as much money as possible in your pocket every month. With a budget and some planning you can avoid racking up late fees and other charges you really don’t need to pay. A budget will not only help you know what your expense are but will also help you keep on top of the dates when those expenses need to be paid. With a budget you won’t waste your hard-earned money on late fees and other unnecessary charges.
I really am a budgeting nerd. I love it! I have more posts about budgeting coming and I can’t wait to share them with you. If you have a specific question about budgeting, feel free to leave your question in the comments or send it to me via my contact form. I would love to hear from you.
Sign-up here to get updates + easy access to my free printables.