If you have a budget that you follow every month, you should be congratulated. The biggest personal finance issue among individuals and families is a lack of a budget. The second issue is having the discipline to follow the budget. However, once you have a budget and have the discipline to follow it, there are still mistakes that will be made that make budgeting difficult. The following are a few common mistakes and how to avoid them:
It is common for a budget to include obvious expenses such as a monthly car payment and insurance, but what is excluded is usually repair and maintenance. It is possible to estimate maintenance costs for tune-ups, new tires, batteries and other necessary expenses. Even though they do not occur every month, these expenses need to be budgeted each month. The same is true for car repairs. Every car needs to go into the shop sooner or later. Use a budgeting program to help you keep track of your many budgets and meet your financial goals.
Not budgeting for annual expenses
This can be a big mistake. Some expenses occur annually and are ignored in a monthly budget. This is a mistake. When the expense comes due, it can be a burden because no money was set aside. This holds true no matter how much or little money is needed. Calculate how much the bill will be each year and divide by 12.
Not including savings
This is not money saved for your retirement, but money set aside for something unforeseen in your life. Things can and will happen that catch you off guard, and you need to have money for this. This money may better be called an emergency fund rather than savings.
Mixing money together in one account
If you have all of your money in one bank account, it can become confusing as to how much money is pointed for which expense. Remember, in any good monthly budget there is going to be money leftover each month because it is earmarked for an expense that does not occur each month. One way to get around this is to use cash for these expenses, and set aside your extra money each month in envelopes allowing the cash to build up.
Not keeping track of your spending
Having a good budget doesn’t mean anything unless you keep track of your spending. You should be able to determine, at any time during the month, how much money you have left for each expense in your budget.
Do not buy your personal checks from the bank. They are too expensive. Banks simply outsource the checks to another company, so it pays to simply buy them yourself. You can find cheap checks with a large selection of pictures at http://www.checks-superstore.com/personal-checks.aspx. Adding your own personal flair to your checks and saving money is a win-win.
By avoiding the mistakes outlined above, you will have a great chance at succeeding with your family budget.