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The 13 most common budgeting errors

What budgeting error is most common?

Budgeting error is a topic is a disliked topic for many people. You also have to deal with making a plan and it will only work if you do it right. If you make a mistake in the meantime, it’s not worth much.

budgeting mistakes

I have already mentioned some very common mistakes in the article on the family budget, now let’s look at them in more detail.

It’s a budgeting error if you don’t have a budget at all

Planning and keeping a budget in the beginning is not something convenient. Later, however, when the money you keep in this way stays in your hand, you will feel better and better from it.

Because everyone has different priorities, budget planning allows you to take control.

It’s also a budgeting error if you don’t even know your spending

It’s not a question of whether you spend on something, it’s also how much you spend in a given direction per month. One of the fundamental budget error is if you don’t collect these, you just type something randomly.

In this case, you can very easily slip into the mistake that your planned budget is far from what you are able to accomplish.

A budgeting error if you don’t plan with small expenses

Even a few euros a day can sum up to a serious amount on an annual basis, which can very easily upset a tighter budget.

The easiest way to avoid this mistake is to plan it. Either you carry in a separate pocket the money you are free to spend at any time, or if you are already consciously managing this part, you will keep track and not spend the part above the limit.

Budgeting error when you only use your budget to document money you’ve already spent

In most cases, you’re done with “planning” your budget by writing down your expenses so you can see at the end of the month to what your money has gone. Badly, you also see what you shouldn’t have spent on.
Compared to the previous point, it’s so much better that you at least know your expenses. Budgeting, on the other hand, is proactive, always done ahead of time, helping you avoid pitfalls that cost a lot later.

An example of this budget error

You want to go with your family on a small vacation in the summer. You are allocating a total of EUR 1.000 for this. If you already see at the beginning of the year that there will be such an expense, you can snatch as much from the revenue of each month by the time you have to pay for your vacation, then that shouldn’t be a problem. If you do not do this, you will either have to postpone your expenditure due in the second half of the year, or you will have to take them out of your existing reserve for another purpose, or you may have to use your credit card and pay interest later.

It can be problematic if you don’t follow up on a monthly basis

The monthly review is also due if you take home exactly the same amount of money for a penny each month. After all, there could be a serious budgeting error from having unplanned expenses (such as a car repair) or just items you somehow spent more on, and you covered the balance with.

You can try it, if you haven’t experienced it yet. Precisely because there are no two months of the same release, completely fixed and static budget planning quite simply doesn’t work.

Error if you don’t have an emergency reserve

The emergency reserve serves as its name suggests. That is, in an emergency, it gives you a kind of safety net so that you don’t have to destroy your previously built life and start from scratch.
However, you can only use this reserve if you have it and it only will be if you build it.

You do not plan for the long term

If you don’t plan for later, it’s pretty much like you want to jump a 2-meter pit with 2 1-meter jumps. It will not work.

Plan in your budget a proportionate share of the expenses that will occur in a given year, but only sometime later. Such expenses usually occur in such cases:

  • non-monthly premium insurance (either plain insurance or savings insurance)
  • gifts (birthday, Christmas, graduation, special occasions)
  • taxes (weight tax, real estate expenses)
  • car related expenses (service, tire change, exam)
  • annual subscriptions, membership fees
  • etc.

You do not have a specific long-term reserve

This has already been discussed in more detail in the section on investing, meaning that it is easier to prepare for the capital needs of each of your life situations if you think in time.

Also be prepared for larger expenditures that are only due after a very long time. This could be your own pension, a home exchange, or just the schooling of your child.
These are the expenses that are sure to show up in your life, but it’s very easy to tell them “then”.

Money needs time to work. You must have heard of compound interest. If you give your money just a little time to work, you are giving up the raising effect of interest rates.

But we can look at an even simpler example of this point. Here, in the calculation, we now disregard inflation and interest and so on. Now there is no inflation and you can only raise money in the pillow case.

Suppose you know exactly that you will need EUR 20.000 in 20 years. Then you can do that by diligently cutting roughly 100 euros out of your salary every month, or you can do that by waiting, but then you will have to put more and more aside. After a while, you should put away more of your monthly income than you take home.

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You don’t plan your priorities first

All budget planning makes sense if it helps you realize the things in your life that are important to you.

One of the elements of a long list of budget mistakes is if you don’t start planning according to priority. In the optimal case, you plan the very important ones, and you only think about the realization of the items without which it is easy for you to live.

It is a serious budgeting error to confuse wants with needs.

You have to spend money on some things. That is a fact.

Then, when the need for existence is confused in your head with your own desire, it will be that you see it as a necessity of existence and so you can’t resist some more valuable gadget, jewelry, or just another pair of the same shoes.

This is often one of the most difficult tasks. After all, the topic here is no longer money management, but self-knowledge, you have to see yourself and give feedback to yourself. If you feel like you’re slipping into this mistake, ask before you buy and honestly answer the question, “How would I solve this differently?”

You don’t spend money on yourself

This error is most common when you have had to divide your money very carefully for a long time or you just want to live too much according to an excel spreadsheet. It will go for a while, what’s more, I can even say it will go well for a while.

Before you get me wrong, there is a life situation where the only solution is very high financial discipline. This is not about this situation now, but about when, fortunately, you no longer have a burning need for it.

The source of the problem is that if you don’t spend on yourself (having fun, relaxing, anything that matters to you), it will kick back after a while. It may take up to 10 years in the meantime, but will break out of you with elemental force, what would have had a reason to be in your life. Just like when you’re on a diet and you can’t even afford a tiny dice of chocolate. After the spectacular results, you may be “devoured” and ruin the results so far.

To avoid this, set aside money for yourself and sometimes file a “cheat day” once in a while when you reward yourself.

It’s a mistake if only one of you handles the money

The family is a unit. Not only legally, but also financially. Unfortunately, I often come across families where one family member has no idea what the money is going for. It can work perfectly fine until the other handles things perfectly well.
This, in turn, can be ruined by many things, from a “simpler” divorce to dying. At this point, it is typical that an inexperienced party does not even know which drawer to look for contracts around.

You don’t work in a team

It’s like when only one of you handles money with so much difference that here only one of you handles money correctly. If one of you scatters what the other has reserved and subordinated, it is not just a budgeting error, but a source of a great deal of debate.


  1. Which mistake do you see as the most common in your own life? How do you solve it?
  2. How do you filter out possible pitfalls in your own case?
  3. What do you think about when the financial habits of two people with different needs living in a common coffers can be reconciled?

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