10 Common Budgeting Mistakes You Might Be Making

https://www.youtube.com/watch?v=QV6L3Ard93Y When we are trying to budget there are a lot of mistakes you can easily make that make it hard to follow your budget and achieve your financial goals. Here are 10 common budgeting mistakes that you'll want to avoid if you want to achieve financial freedom. 1:11 - #1: Not Finding a Budget That Suits You 2:22 - #2: Not Automating Things 3:26 - #3: Not Checking In With How You're Doing 4:25 - #4: Overspending 5:00 - #5: Making a Budget That Is Too Tight 5:45 - #6: Not Seeing Budgeting as a Skill 6:41 - #7: Having Everything Mixed Up and Not Having Clarity 7:57 - #8: Not Paying Yourself First 8:47 - #9: Not Budgeting For Things Like Christmas and Presents 9:41 - #10: Not Putting Aside Money For Big Bills or Holidays Transcription when we're creating a budget or trying to budget there's a lot of mistakes that you can easily make that can make it really hard to follow your budget and really hard to achieve your financial goals so in today's episode I want to talk about ten different common budgeting mistakes that you may be making right now and don't worry I'm pretty sure I've made every single one of the mistakes on the list hi i'm ryan from on-property helping you achieve financial freedom and budgeting can be a really dirty word it could be something that we like to avoid but if you want to actually achieve your goals if you want to invest in property and achieve financial freedom then you will need to budget and you will need to save that deposit and budgeting putting money aside spending less than you earn is a big part of growing as an investor and having money so you can invest so I've done many different budgets throughout the year years and made a lot of different budgeting mistakes and so hopefully you can learn from these mistakes and not do them yourself so see myself make these mistakes as well as other people so the first biggest mistake and this is the one that kind of kept me back for years was actually not finding a budget that really suits you and suits your needs there's a lot of different ways to budget out there people use everything from the envelope method where you actually get out physical cash and put it in envelopes and set it aside people do that people use applications for it I used to track our budget in an app people use spreadsheets there's all sorts of different ways that you can do it ultimately the way that I found works for me was to actually set aside money and automate a lot of the regular payments so things like my monthly internet phone bill rent all of that sort of stuff even car registration I used to save for on a monthly basis I would set that all aside and then I would give myself a weekly amount of money that I could spend and then I can spend that on whatever I want during the week so some of that might go to groceries some of that might go to going out and depending on the week depends whereas fence I'll finally found one that works for me so have a look at the different budgets out there and try them and find the one that's going to suit you best the second mistake is not automating things so there's a lot of payments and a lot of things that happen in your life that are automatic generally most people get paid on the same day every single week or in the same date every single month so that is automatic and so to make budgeting easier when you get paid having a lot of things happen automatically just makes your budgeting on autopilot something you never have to think about and it's automatically happening so paying yourself first putting money aside for the big bills saving for your holidays paying off debt if you have all of that stuff happening automatically as soon as you get paid you set up a scheduled payment that's recurring in your bank that money goes to where it needs to go so once it's automated then you're only focusing on the actual choices you need to make because if you're relying on yourself going into your bank account every single week or every single month and consciously making that decision to budget and to put money in the right places chances are sometimes you're not going to do that and if it's automated just happens for you it's not a decision that you need to make the third thing is not checking in with how you're doing and this is just being in denial basically and not staying on top of things I've definitely done this throughout the years when Christmas time comes around or you know I know I spent too much for the week rather than actually logging in and looking at my bank account and seeing where I'm at and seeing how much I have you just do the like blind tap and just hope that you have enough money in your account and you're not aware of where you're at you're not aware of where your debt repayments are up to or how much you've spent for the week and when you're not aware then that's when your budget can really get out of control you can really overspend and you're not staying on top of things so even though it's hard emotionally to stay on top of your budget and look at it by looking at it every single day or by looking at it regularly that's going to help you stay on top of it the way that I do it now is I've got a separate spending account and then I can just log in and check that really quickly see how much I have left for the week because everything else has automated so the fourth one is overspending which is going to happen from time to time we all don't necessarily follow our budget a hundred percent of the time and there may be times when you overspend but then overspending and then just throwing your budget out the window is the biggest problem that I see people have but overspend they say okay I stuffed up my budget so then they just give up no when you overspend that's time to adjust and to say okay where can I cut back to make up for that overspending or overspend how can I reset so that I don't do that again and learn from your mistakes the fifth one is making a budget that is just too tight and so saying okay each week I'm only going to spend this amount of money on food but that's not a realistic figure and that's only if everything absolutely perfectly happens in your life every single week is that you'll spend that much money on food you'll never go out everything that you buy is on sale but then if you're out one day you know you're going for drinks with friends and you decide to buy coffee or a cocktail or you eat out for dinner once that week and your whole budget is thrown out because you're so tight there's no margin for error so make sure you leave some room for error and leave some room for some flexibility in your life don't make your budget too tight the sixth one is not seeing budgeting as a skill I was definitely you know at fault with this one is seeing budgeting is something you're either really good at or something that you're not good at and I just thought I'm not good at budgeting and so I just kind of didn't try and improve my skill in that or work on it but realistically budging is actually a skill it's not something that you're born with as a child it's not something you have or you don't it's a skill that you can develop over time through use and through learning so as you're budgeting you're gonna make mistakes you're gonna make lots of mistakes you're gonna spend in the wrong areas you're not going to stay on top of things you're going to make all the mistakes are talking about today but budgeting is a skill and something that you learn over time so when you make those mistakes then learn from those mistakes and get better and realize that this is a skill that I'm going to improve that if I'm diligent and if I practice it and the more you do it the more you practice it the easier it becomes to get that skill of budgeting the seventh thing is not having one spending account now this is definitely dependent on what type of budget you set but for me I had everything all in one account and so I had all my bills coming out of the one account I don't mind a spending coming out of the one account I had everything all mixed up in this one account we just made it so hard for me to have clarity on where I was adding my budget how much money I had left for what and I would constantly have to go in and kind of really analyze it which meant I wouldn't really do that very often whereas having one spending account has been so good for me so I've got an account that I get paid into and then all my bills and regular things come out of that account and then money gets moved from that one account I get paid into into a separate account that is my everyday spending account so every week money gets moved into my everyday spending and that's how much I have to live off for the week so I'm not no longer questioning how much money do I have left what have I spent on what it's like no everything's automated in one account and that money automatically moves over to my everyday spending and this account is the one that I focus on and then I have choice and flexibility so all I have to do is check that one account because I know everything else is taken care of so having that one spending accounts really been helpful for me number eight is not paying yourself first so one of the things that I like to do is every time that I get paid is money gets put aside at the moment it's for debt reduction or it can be for savings or it can be for investing but when I get paid rather than living off everything and saying okay I will just save or invest whatever I have left over which let's face it there's never anything left over it's important that I actually pay myself first and actually make that a priority and then strive to live off the rest or make more money so that I can afford to live off the rest and so paying myself first is very important something I didn't do for many years and that I find extremely useful for reducing debt for budgeting for saving for investing ...