Budget Worksheets – 3 Biggest Mistakes When Creating a Budget

More and more people are trying to create a budget to live by these days with the state of the economy. However, many people have never creating a budget before and are doing so for the first time. When you are creating a budget there are three common mistakes that you will want to avoid and they are listed below.

Mistake #1 – Not Knowing Exactly What You Spend in Each Category – It is extremely difficult to create a working budget if you first don’t know how much you typically spend in each expense category. This is why it is very important to track your spending for 30 days before creating a monthly budget. You will be surprised by how much you actually spend in each expense area.

Mistake #2 – Not Tracking Your Spending and Expenses – It is impossible to keep to your monthly budget if you fail to track your spending. It is recommended that you fill out both a weekly expenses report and a monthly expense record worksheet to track your spending and monthly expenses. It you don’t track you spending you will not know what areas of your budget you need to adjust for next month.

Mistake #3 – Not Planning for Upcoming Expenses – When you are creating a monthly budget it is always helpful to save a certain amount of money for a given category even if you don’t have that expense for the given month. For example, let’s say you pay your car insurance every six month. It is important to take your payment and divide it by six. Then, each month you will want to save that amount so you have the insurance payment when it comes due instead of trying to come up with the whole amount in one given month. If you can do this for as many periodic expenses as possible, it will be easier to have a balanced budget each month.

So, as you can see, if you avoid these common mistakes when creating your monthly budget you will be well on your way to a balanced budget.

And if you would like a free chapter of our “Finacial Solutions” Workbook along with three of our budget worksheets just go to http://www.financialsolutionsadvisors.com and sign up for our free newsletter. You will also receive helpful budgeting tips along with money saving ideas.

By: Rhonda Percell – Financial Advisor with REM Financial Solutions