Personal Finance Budgeting – Major Personal Budget Mistakes

In this article we are going to talk about some of the common personal budgeting mistakes that people make when writing and trying to follow their personal budget. The following personal budgeting mistakes are some of the most common ones that cause people to or quit on or fail on their personal budget.

1) Not creating a personal budget

I decided to put this first because I know that some of you are still thinking that you can get away with not writing out a personal budget for yourself. You think that you can keep it all under control in your head and you are wrong. This is the most important step in budgeting and it is sad that most people do not even make it to this step. You cannot fail or succeed in your quest for financial freedom if you do not try.

2) Being sure that you are adding correctly on your personal budgeting worksheet

This is a somewhat dumb, yet common among budgeting mistake. Often people make simple addition and subtraction mistakes and end up thinking that they are spending $200 less than they actually are. It is always a good idea to double check all of your budget numbers to make sure they are correct.

3) Lack of Consistency in Savings

People need to have a specific line on their budget worksheet that it dedicated to tracking their monthly savings. After doing this people need to establish a specific amount that they plan to save each month and then stick to it.

4) Failing to establish an emergency fund for unexpected expenses

The majority of people do not realize that they need to have an emergency savings funds to help in case unexpected expenses comes up. This money is set aside in a savings account so that you don’t have to deviate from your budgeting plan if unexpected expenses come up.

5) Making only minimum payments on your credit cards

When people setup their budget they often only budget to make the minimum payments on their credit cards. People need to do their best to allocate a large amount of money toward credit cards payments each month so that they can pay off their debts quicker.

6) Taking all the fun out of life by having a overly restrictive budget plan

When you make your budget plan you need to plan for a portion of your money to go to fun and entertaining activities. If you do not do this you will find your plan to be to restrictive and will likely not follow it. You can budget for this by cutting out some other expenses.

7) Spending more money than you make

This is often the biggest mistake in a personal budgeting plan. When making your budget you need to make a plan where you are spending no more than you make.

This is a short list of some of the major personal budgeting mistakes that people commonly make. If you can avoid these mistakes it will greatly increase your chances of being successful in your quest for financial freedom.

Mark Loy is a self-made Personal Financial Advising who specializes in give out free personal financial advice over the internet. You can visit his Financial Advisers blog to learn more about Personal Budgeting