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  • Dave Fullerton

8 Ways You Accidentally Ruin Your Budget

Despite the effects of the current onslaught from inflation and ever-increasing prices, the basic concept of budgeting hasn’t changed. Dividing up your money into little piles for the various things you need (and want) doesn’t seem like such a difficult process, so why is a budget so hard to put into practice?


Even the best of us makes mistakes from time to time that can quickly derail our budgets. Here are 8 ways you might be accidentally ruining your budget without even realizing it. Read on to find out how to avoid these budget busters.


1) You didn’t start with the right number. 

Your take-home pay (AFTER all deductions) is the starting point.


2) You used the wrong time frame. 

Some bills are monthly, but most of us get paid every two weeks. Thus, a two-week spending plan is much easier to follow and matches your cash inflows. Just make sure to account and save for the bills.


3) You had no idea how much you were spending when you made your budget. 

To create a budget you can afford, it's important to track your expenses over at least two pay periods and use the data from these accounts to create an accurate estimate. You might need some tweaks here or there, but overall this should give us something better than guessing.


4) You forgot to record all of your expenses. 

Tracking your expenses is essential to any budget. Whether you use the latest app or a collection of post-it notes, ensure it's quick and easy with no habituation needed! Don't forget those invisible but necessary things such as interest expense on credit cards - leave that cash in the bank for now so all transactions can easily be displayed through online banking systems where they are available (many banks offer this feature).


5) You spent too much. 

Before making any decisions, list all those necessary expenses along with what can be done without, analyze which want has priority over another one, and then determine where these funds will come from to decrease the chances of overspending.


6) You didn’t contribute to a reserve fund. 

Unexpected expenses like birthday presents, car repairs, or a trip to the dentist can derail your budget if you don’t have an emergency fund to dip into. Set aside some contingency cash to give you a little wiggle room.


7) You didn’t ensure your family and friends knew. 

It’s a household commitment with all hands on deck. Take the time to explain to your kids that the actual supermarket cost of the food in a take-out burger & fries is likely around $2 and that by cooking it at home, you now have $5 more in your pocket (and arguably a much better burger!). Don’t be shy about telling your friends either– declining an invite for a night out is not a crime. Nights in can be equally as rewarding as well.


8) You had no goal and lost motivation.

Pick a realistic goal your budget will help you achieve and track your progress… Whether you are trying to pay off a credit card, topping up your RESP/TFSA/RRSP, or eliminating your line of credit balance, keep your goal known. It will help you have something to work towards.

Creating and maintaining a budget is a lot harder than it seems.


Creating and maintaining a budget is a lot harder than it seems. Most of us will have to make some tough choices and rearrange priorities, but good processes in place to evaluate those decisions will help keep you focused.


Want to learn how to save and create a beneficial budget this holiday season? Refer to our blog for some tips on how to do so.

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