Common Family Budget Mistakes

It’s not always easy maintaining a family budget. There are tough decisions to make. If you’re not diligent about where your money goes when it comes in, you can get into some real financial danger. And before you know it, you have a household deficit situation.

Here are some of the most common budget mistakes families make:





  • Not tracking actual expenses. Just because you’ve written out a budget and identified all of your expenses doesn’t mean you’re actually following your buget. You need to track the actual dollars you spend each month and compare them with how you’ve planned. As an example, you might face high electric bills during the summer months because of air conditioning. You need to be able to then adjust your budget based on the actual outflow of money.
  • Not setting aside savings. You’ve probably been told this a thousand times, but it still bears repeating. You need to have a specific line item in your budget for savings. You need to set a goal that, eventually, you’ll build up enough in your savings account to cover your family expenses for at least three to six months. Ideally, you’ll make this savings account untouchable, or at least very difficult to get to, so that you won’t be tempted to deplete it for other reasons.
  • Not planning on irregular expenses. There are some expenses that just aren’t monthly. Think about things like property taxes, clothing, medical bills, vacations and more. You need to set aside money out of each paycheck to pay for these items, even if they aren’t occurring in the current month.
  • Not factoring in every expense. This is an easy one to fall into. For example, you might buy lunch every day at work. That doesn’t seem like a large expense. But, at $5 to $8 each day, you’re looking at between $100 and $160 a month. That needs to be a part of your planned budget.
  • Living beyond your means. Your income needs to exceed your budgeted expenses. If it doesn’t, you have to trim back your budget, or find another way to earn more money (such as a second job, training for a better job, etc.)

So, what do you think? What budget mistakes have you made or have you seen?

 


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