4 Budgeting Mistakes All Beginners Make

If you want to save money, there’s no better way to do it than to create and maintain a personal budget. Among its many benefits, budgeting can help you keep track of your spending, save money, and work toward higher financial goals. But those new to budgeting tend to make a few major mistakes that can threaten their long-term financial success. Luckily, with a little foreknowledge, you can avoid their perils and maintain sound financial health.

Mistake #1: Taking Your Bills at Face Value

Often, those who are new to budgeting will collect all of their bills and set their budgets based on the numbers that they see. What they don’t realize is that some bills can be negotiated or even permanently lowered. Aside from being a smart shopper and finding the best deals on items, you can also call cable and electricity companies to find better rates or new deals for your service, especially if your contracts are up for renewal. If you have regular expenses, like yard work, that need to be taken care of, you might consider using the old-fashioned method of bartering to save even more money. Finding the best deals on every product or service that you can will give you a larger overall budget with which to work.

Mistake #2: Pinching Too Many Pennies

Saving is an important part of budgeting, but trying to scrimp too much can actually blow your budget. If you set your budget too low and get into the habit of going over, you may slip into a pattern of over-spending and eventually decide that budgeting is impossible. To avoid setting yourself up for failure, be realistic when you initially set your personal budget: Understand how much money you need to spend and not just the amount of money you want to save. Catalog and analyze all of your expenses so that you know what you need to live comfortably. In addition, allowing yourself an occasional “splurge fund” and considering it as a reward for staying on-budget can keep you on track and help you resist the temptation to overspend on higher-ticket items.

Mistake #3: Neglecting to Monitor Your Spending

It can be easy to lose track of what you’re spending if you don’t document where every one of your hard-earned dollars goes. To remedy this, collect receipts and document every one of your purchases. Make a habit of tracking all of your purchases by category, no matter how big or small; even minor purchases can add up in the long run! Regularly review your bank transactions to see where every penny is spent. Consider using a budgeting app like Mint or Wally that will help you visualize your spending and better understand which categories get the most of your money.

Mistake #4: Not Setting Aside Money for Emergencies

Let’s face it: In today’s uncertain world, anything can happen, and it sometimes does. Living on a strict budget and exercising amazing self-control can mean nothing if you’re one of the 40% of Americans who can’t cover a $400 emergency expense. Consider setting up a special savings account for emergencies, maintaining a set amount in your checking account, or simply using an envelope to set aside money as it comes into your household. If you have a specific amount of money that you want to save for emergencies, consider adding it into your overall budget until you reach it, then keep adding to the envelope as you see fit. Maintaining an emergency fund can increase the chances that you’ll stay on budget when/if unforeseen circumstances arise.

You might also like...

1 Title-Secured Loans, Secured LOCs and Title Pawns: Maximum pledge amount in Mississippi is $2,500. Maximum loan amount in Tennessee is $6,500, assuming customer qualifies for and accepts both the pledge max of $2,500 and Secured LOC max of $4,000. Refinancing is not available for Mississippi or Tennessee Pledge products. Minimum loan amount for title-secured loans in South Carolina is $601.

Must be at least 18 years of age (19 in Alabama). Account approval requires satisfaction of all eligibility requirements, including a credit inquiry and motor vehicle appraisal. Must present valid government issued ID. Certain other eligibility requirements and terms & conditions apply. Loan/LOC/Pawn amounts vary by states and product. LOC customers are subject to a periodic collateral review to maintain credit limit. Proof of income documentation and ability to repay analysis is required in Missouri, Nevada, some Texas locations, and Utah.

2 Personal Unsecured Loans/LOCs: Unsecured loan amounts and products not available in all stores/states. In-Store: Account approval requires satisfaction of all eligibility requirements, including a credit inquiry. Bring in active bank account details (dated within the last 60 days), and a valid government-issued ID to apply. If your bank account statement does not show recurring income deposits, you will need to also bring in proof of income, like a paystub, from within the last 60 days. In AZ, a valid AZ motor vehicle registration in your name is also required. Min $601 in SC. For new personal/unsecured loan customers without SSN or ITIN, max loan amount is $300. Online: If you do not have an SSN or ITIN, please visit us in store to apply. Additional items required for eligibility, including: a valid and active email address and telephone number, and a valid SSN. You must also reside in a state in which we do business (currently AZ, DE, KS, MO, MS, SC, TN, TX, UT or WI). Min $610 in SC. Certain other terms and conditions may apply.

– California, Illinois and Virginia Residents: TitleMax® no longer originates new loans in CA, IL or VA, but continues to service existing loans.

– Please see our California Resident Notice at Collection and Privacy Policy: Submit a Verified Consumer Request to understand what information we collect, disclose, or sell, to request that we delete your information, and/or opt out of selling by clicking Do Not Sell My Personal Information.

– In Georgia, TitleMax offers Title Pawns.

– New Mexico Consumers: please see important New Mexico Consumer Information and Disclosures.

– In Nevada, title loans should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any title loan transaction. Ability to repay analysis with income documentation required.

– In Tennessee, TitleMax offers title pledges, and secured and unsecured Lines of Credit (“LOC”). Only one LOC account allowed per customer, inclusive of other lenders. LOC customers are subject to a periodic income (and collateral, if applicable) review/validation.

– TitleMax of Texas, Inc. and TitleMax Online of Texas, Inc., d/b/a TitleMax acts as Credit Services Organizations to assist customers in obtaining a loan through an unaffiliated third-party lender. Please see store associate for details. Please see Texas Schedule of All Fees. TitleMax does not offer pawn loans or pawn transactions in Texas.

– TitleMax®, TitleBucks®, and InstaLoan®, are not considered competitors. Please see a store associate for details.

Which login page are you looking for?

Opens in a new window