I believe having a monthly working budget is the key to your financial success. If you can’t control your money via a budget, you can’t build savings, you can’t pay-off debt, and you can’t plan for the future. However, if you are getting started with the budgeting process, you might run into some issues. Here are 6 Common Budgeting Mistakes and how to solve them.

1. 6 Common Budgeting6 Common Budgeting
MistakesMistakes

2. The Budget is the Key
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I believe having a monthly working budget
is the key to your financial success.
If you can’t control your money via a
budget, you can’t build savings, you can’t
pay-off debt, and you can’t plan for the
future.
However, if you are getting started with the
budgeting process, you might run into some
issues.
Here are 6 Common Budgeting Mistakes
and how to solve them.

3. 1. Failing to Track Your Expenses
August-2014 6 Common Budgeting Mistakes - www.figueroafinancial.com 3
A budget is simply a plan for your money. And the
only way a plan of any kind works is if you can measure
the results against the intent of the plan.
You need to face the reality of how you are spending
your money.
I will admit that I am a bit obsessive with tracking
spending but I have a system that works for me.
I can always tell where we are at any given point in the
month. It gives me great peace of mind.
Do not neglect to track your actual expenses as it will
give you a good view on how well you did in planning
your budget.

4. 2. Preparing a Budget but not Using It.
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You may have done all the preparation work on
Quicken, YNAB, or an Excel Spreadsheet. You
even did it before the month began and you
allocated every dollar to a spending category.
But now, the budget is filed away and the month
goes by without you checking how you are
doing against the budget.
Remember, the budget gives you the
boundaries for your spending (like the foul lines
on a baseball field that enclose the fair area of
play).
So I don’t’ suggest you look at your budget every
day but at least take a snapshot once a week.
Get the budget out and see how you are doing in
staying on track with your money plan.

5. 3. Failing to Adapt/Change When it is Needed
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As you keep an eye on your expenses against your
planned spending, you will be able to gain insight
into any required adjustments.
For example, you may have an unexpected drive
out of town and you need to increase the
allocation for gasoline.
And perhaps your clothing needs are not as high
this month as you thought. So you make the
adjustment in those categories and balance your
budget.
Remember that this is your money and your
budget.
It is not written in stone so if the conditions of the
month change, hold a budget committee meeting
and make adjustments as needed.

6. 4. Forgetting to Prioritize the 4 Walls
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Your budget is a great tool to help you
prioritize your spending. First and foremost
you need to take care of your family and
yourself.
This means that the 4 walls need to be
protected by allocating the spending first
those categories.
The 4 walls are: food, shelter/utilities,
transportation, and clothing.
If you take care of those items first, you
will be in a better position to deal with the
rest of your spending because you would
have taken care of your family first.

7. 5. Making It Too Complicated
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The big mistake is making this process of
budgeting too complex.
The reality is that the concept of
budgeting is very simple: lay out all your
income side by side with your expected
expenses.
Then allocate each available dollar to a
spending category. That’s it.
You could get bogged down with all the
configurations of a tool like Quicken or
build an Excel spreadsheet with 20 tabs.
Keep it simple and it will be easier for you
to stay with the budgeting process.

8. 6. Running into the Budget Busters
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Irregular Bills: These are the items that are not due
every month. For example, you may have your car
insurance payments on a quarterly or semi-annual
schedule. Or you might belong to a Home Owners
Association (HOA) and the dues are paid every six
months. In either case, you need to plan ahead and
set the money aside.
Birthdays: This might seem pretty basic, but when
you are learning to manage every dollar, it can get
tricky. In our household, we have some months that
are more birthday heavy than others. We budget
accordingly.
Food: When we first started doing a budget, this area
was our biggest problem. We consistently went over
in our eating out expenses and in some months, we
also went over with groceries spending as well. The
answer to this budget buster was to use the envelope
system and use cash instead of our debit card.

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10. About the Author
August-2014 6 Common Budgeting Mistakes - www.figueroafinancial.com 10
José R. Figueroa is a Christian Personal
Finance Coach/Blogger @ Figueroa Financial
: Help and Hope for Your Finances.
He is also the author of the e-books
7 Principles for Financial Success and
Not Mine, Not Yours, But Ours now available
@ Amazon.

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