Mistakes to Avoid When Creating a Budget
All budgets are not created equal. Some are great, some are okay and some are – well, something else. You understand, for example, the benefits of budgeting for your military loan payments, but do you remember to budget for your Starbucks, too? Budgets are full of opportunities to make mistakes and the chaos of military life can make them even more likely. To help you avoid some of the common blunders, we’ve come up with a handy list to keep you on the straight and narrow.
Budgeting With an Iron Fist
An inflexible budget is a disaster waiting to happen. It’s important to leave some wiggle room for unforeseen expenses and splurges. A rigid budget can make you feel like a dictator and the frustration of always coming up short may lead you to abandon the whole thing. Whether you use it or not, be sure to add a line item each month for luxuries or surprise expenditures.
It can be tempting to leave the budget-balancing to the last minute. Who has time to enter that grocery store receipt now, anyway? This is one of the most common mistakes people make when trying to stick to a budget. Part of budgeting is teaching yourself to make the right decisions and that’s downright impossible when the decisions were made a month ago. When you track your expenses daily and revisit them on a weekly basis, it’s easier to see where your money is going and avoid common pitfalls.
Forgetting the Small Stuff
It’s easy to budget for the mortgage payment, car insurance, and grocery bill, but what about those little budget-busting expenses? A gym membership or a Netflix account may seem like a negligible expense now, but they add up over time. If you spend money on it, it should be in your budget regardless of the amount.
Leaving Out the Savings
A budget is all about saving money, so why wouldn’t you budget for savings? Think of contributions to your savings account as just another bill and put it in the budget accordingly. Setting up an automatic transfer from your checking account to your savings account is a great way to do this and if you’ve budgeted correctly, you’ll never even know it’s missing.
We all need a budget. Without it, we have no rhyme or reason to our cash flow. A fantastic budget will help keep your spending on track without making you feel like a kid on a skimpy allowance. Avoid these budgeting mistakes and take a step down the road of financial freedom.
How do you keep yourself and your family on budget? What budgeting tricks do you have for other military members? Share your advice with us!