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  • Your top 5 budgeting mistakes and how to avoid them

    Budgeting your money is one of the best financial decisions you can make, but even the most thoughtful budgets can have pitfalls. Here are some of the biggest budget mistakes and how to solve them.

    Top five budgeting mistakes

    1. Not writing down your expenses. When it comes to sticking to a budget, it is of the utmost importance that you have current, accurate knowledge of how much you are spending.
      • Solution: Log your purchases, check your bank account, or keep receipts to stay up to date on your spending.
    2. Incorrect account of spending. If you are estimating your spending, but aren't exactly sure how much you've spent, you could be putting your budget in danger also. Having an inaccurate account of how much money you've used can sway you to think you have room to spend more money than you should.
      • Solution: Log your spending correctly. Check your online banking regularly so that there are no surprises.
    3. Impulse buy. The age-old enemy of your wallet is the impulse buy. Whether it be the hotdog stand outside your office, a new pair of shoes that are on sale, or a multitude of other things, everyone has fallen victim to this wallet villain at some point.
      • Solution: If you know that you're an impulse buy sufferer, allot extra money in your budget for such purchases. Don't allow yourself to go overboard, but having money set aside for extra things can allow you to feel like you can still enjoy your life, while keeping your budget on track.
    4. Keeping up with friends. Sometimes it can be hard to stay on track with your budget if you have friends that are constantly eating at restaurants, going out at night, or making last-minute spending decisions. You want to save your money, but you also don't want to be left out of all of the fun. What are you supposed to do?
      • Solution: Communicate your concerns with your friends. If they truly care about you and your needs, they'll understand and will want to help you. Also, suggest doing something that's more in your price range. A weekend BBQ can be much cheaper and you can spend quality time with your friends.
    5. No breathing room. When you're making your budget, make sure that you are making a plan that you can actually realistically live by. If you make a budget that doesn't allow you to live your life, you will either end up spending too much money, or will be unhappy with your life.
      • Solution: Make a plan that you know you can follow. Make sure that you have enough money put aside for bills and savings, but also allot extra money for little things that you will want throughout the month. Understanding your spending habits and basing a plan off of them will make it much easier to stay on track with your budget.

    [1] 5 Critical Budgeting Mistakes to Avoid, U.S. News
    [2] Budgeting Basics - Mistakes To Avoid, Investopedia
    [3] 4 Common Budget Mistakes and How to Avoid Them, Mint

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