Budgeting can be a helpful part of saving to reach financial goals. Budgeting can help you track your spending, save up, prepare for life events and emergencies, or reduce financial stress. But there are several common mistakes that people make when budgeting.

1. Being Unrealistic
   When making a budget, being unrealistic could quickly throw your budget off balance. This can happen in a few ways, but most commonly it happens when your budget is designed too conservatively. This could include not properly budgeting for how much you will truly spend on monthly expenses like going out to eat, going to the grocery store, going out with friends, or when prices spike.
   
   To combat this, consider being as realistic as possible with your budget. Track your spending before starting your budget to help ensure you are aware of how much you spend. Consider giving yourself wiggle room in your budget for price increases at the grocery store or gas station. Also consider budgeting for extra expenses starting out until you are accustomed to your new budget. 
   
   
2. Not Planning For Emergencies 
   When budgeting, a common mistake is not budgeting for emergency expenses. Emergency expenses or bills can make an unexpected hit on your budget. Unanticipated situations like household items breaking, emergency vet appointments, and doctor visits can impact your budget if you don't plan properly. Forgotten expenses like holiday gifts or annual subscriptions can also impact your budget. Consider setting aside a certain amount every month for possible emergencies or forgotten expenses.
   
   
3. Giving up too Soon 
   When getting started, budgeting can be difficult, and it can be hard to stay on track. Budgeting takes time and giving up too soon is a reason your budget may not be working. Overspending or getting off track could lead you to feel discouraged about wanting to continue. Instead of quitting, try reassessing and rebuilding your budget to better fit your needs.
   
   
4.  Overcomplicating your Budget  
   As you start your budget, try to create as few categories as possible. Breaking up your budget into too many categories can overwhelm and discourage you from sticking to your budget. Consider creating a few main categories, getting those under control and then expanding categories if necessary. Some categories to consider starting with are groceries, eating out,  bills and necessities, and an emergency fund.
   
   
5. Failing to Track Your Spending   
   Not only is tracking your spending important to begin a budget, but it is also important to keep your budget working properly. Consider keeping track of your budget each day and categorizing where your money goes. Tracking can be simple and includes your income and subtracting how much you spend monthly and noting where you spend the money.

Consider these tips to avoid common budgeting mistakes. Try tracking how you spend, continuing even if you get off track, simplifying your budget, planning for emergencies, and being realistic. Reach out to DCCU to see how our team can help you by visiting our Contact Us page. 

This article is for general information only and not intended to provide specific advice or recommendations for any individual.