7 Budgeting

Mistakes

And What to Do Differently

We had just moved to the US. Both of us were 30, and we had two toddlers. I knew my salary would be just $31,000. I also knew that my immigration status locked me into that job, and that my wife’s status would prevent her from working at all.

Almost obsessively, I’d review our budget over and over, trying to figure out what we could remove or at least trim.

I’d try to convince myself that we could cut our grocery budget by $100 or even $50. Somehow, by the end of the month the total spent on groceries was the same as it was before.

Here are the 5 lessons I learned from that time.

1. If you make barely enough to survive on, you can’t budget your way to prosperity; but if you don’t track your spending, you can easily get into financial problems (a.k.a., a debt spiral).

Avocado  Shake

2. No matter how little you make, carve out at least a few dollars to set aside for an emergency, at least a few dollars for the future, and at least a few dollars to have fun.

3. Family support is crucial to financial survival. Even when you can’t afford much, you can still have a great time with friends.

4. Always keep hope alive and keep your eyes open for opportunities; one of my favorite quotes says, “Good fortune is what happens when opportunity meets preparedness.”

Budgeting Mistake #1: You Don’t Budget

If you don’t budget, why would you expect to achieve anything financially?

Budgeting Mistake #2: You Don’t Track Your Expenses

If you don’t know where your money goes, you can’t stop it from leaking and getting frittered down to nothing.

Budgeting Mistake #3: You Don’t Save For Emergencies

A major medical problem, a major auto repair, losing your job, etc. Without an emergency fund, it’s not a question of if, but when, something unexpected like that will happen and knock your finances for a loop.

Budgeting Mistake #4: You Don’t Invest For The Future

Unless you die before it happens, you will reach a point where you’re unable and/or unwilling to keep working for money you need to survive. To avoid financial ruin when that happens, you must set aside money for that future self.

Budgeting Mistake #5: You’re So Frugal That Life In The Present Is Unsustainable

If you have zero fun now, it’s almost guaranteed that you’ll grow tired of it and fall off the wagon. This is the same problem as going on a too-extreme diet.

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