You’ve heard it like a broken record: You have to make a budget.
Aside from getting a serious windfall, tracking your income, spending and progress toward financial goals is the best way to build a life without constantly panicking about money.
So you’ve made a budget.
But you still seem to be falling short of your goals — overspending, under-saving and wondering at the end of each month where the heck your money’s gone.
You might be making one of these common budgeting mistakes. Here’s how to recognize and fix them.
1. Making Your Budget Too Strict
You can probably guess that a too-strict budget is going to be frustrating and make it easy to give up altogether.
But it also becomes pointless way too easily, Lifehacker points out.
When your budget leaves no wiggle room, any discretionary spending will throw it off.
2. Budgeting for a Life You Can’t Afford
Of course, you have to be realistic about the fun money in your budget. Don’t let it get out of control.
That’s how you end up living paycheck to paycheck, spending your income before you have it.
If you’re stuck in this cycle, start your budget from scratch, Lifehacker recommends. Consider what you have coming in minus your regular expenses, bills and savings.
Once you know what’s left over, determine how you’ll allocate it for fun — not the other way around.
3. Budgeting Without a Purpose
Face it: Budgeting is boring.
Counting every dollar and planning how you’ll spend it is few people’s idea of fun.
But when you have a goal, it becomes a much more rewarding process. Instead of arbitrarily setting your budget, determine what you’re saving for — and why it’s worth sticking to your plan.
You probably have big goals — buying a house, raising a family, traveling the world or retiring at a certain age. Maybe saving money will help you create the cushion you need to quit your job and find something you love.
But even without those big goals, you can set your budget’s purpose.
For example, paying down debt with excruciating monthly payments could mean drastic improvements to your lifestyle as your credit score improves. It’ll be easier to get an apartment, rent a car and more!
4. Forgetting About Irregular Expenses
Do you feel like you’re doing fine with money… until you suddenly have to pay your annual car registration?
Or buy holiday gifts? Or attend your cousin’s wedding? Or your car breaks down?
If that’s the case, you’re not fine for money.
These expenses may be irregular, unexpected or tough to predict, but they’ll certainly happen. That much you can plan for.
Instead of feeling an extra $90 strain the week you have to renew your registration, spread the cost out over the year by saving $7.50 each month. Much more palatable, right?
You have 52 weeks a year to save money for Christmas — don’t let holiday expenses break your budget every winter. Decide what you’ll spend next holiday season, and start setting aside a little each week now.
You can do this with seemingly unexpected expenses, as well.
Weddings usually come with months to plan, so you shouldn’t be caught off guard buying your dress, transportation and a gift the week before.
I can guess I’ll face around $500 in unexpected car maintenance this year (based on experience), so I’ll be well-prepared if I set aside just $20 with every paycheck. If the car holds out, then I’m ahead!
5. Not Having a Cushion
Similar to creating a too-strict budget, setting your spending limits to the lowest amount you predict you’ll spend sets you up for failure.
If you expect to spend $200 this month on groceries, budget for $250. If you’ll probably spend $75 on gas, budget for $100.
It also means building an unallocated emergency fund, so when the unexpected sneaks up on you, you’re prepared.
Your Turn: Are you making any of these common mistakes? Will you use these tips to fix your budget?
Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more.