Avoiding common budgeting mistakes: How to make a budget that sticks
Have you ever set a budget for yourself, but found you couldn't commit to it? That's okay, and you're not alone! According to NerdWallet, 84% of Americans with a monthly budget at some point1.
Between the costs of groceries, gas and raising a family, it can feel impossible to adhere to a savings plan. But the good news is, we've got your back!
At Abound, we know the value a strong budget has on your financial health. That's why we've made a list of common budgeting pitfalls and how you can avoid them:
Ready to take the next step in achieving your savings goals? Stop by a branch today to open a High-Yield Savings Account!
Between the costs of groceries, gas and raising a family, it can feel impossible to adhere to a savings plan. But the good news is, we've got your back!
At Abound, we know the value a strong budget has on your financial health. That's why we've made a list of common budgeting pitfalls and how you can avoid them:
- Estimating expenses - Estimating your monthly costs can lead to overspending and taking your budget off course. To ensure you're accurately tracking your expenses, review your past bank statements and make notes on your monthly spending patterns and debt payments. This allows you to plan confidently and stay aligned with your budgeting goals.
- Planning around gross income - If you use your gross pay to try to determine your budget, you will overallocate your funds. Instead, use your net pay or "take-home pay" as this is your money after taxes and other deductions are taken from your paycheck. To calculate your monthly income, review your direct deposit history and use that amount as your baseline.
- Being too restrictive - Highly restrictive budgets are not sustainable long-term. The pressure to follow strict rules can cause budgeting burnout and lead to impulsive spending from feeling deprived. To keep your motivation, allow flexibility in your budget for discretionary spending so you still have room to do the things you enjoy.
- Not planning for emergencies - Life happens, and sometimes unexpected costs arise like medical bills and home repairs. If you aren't accounting for emergencies in your savings plan, these expenses can quickly derail your finances. Establishing an emergency Savings Account allows you to be financially prepared and with our High-Yield Savings Account2, you can boost your savings fast! With the power of compound interest and monthly dividend payouts2, you will build financial security effortlessly.
Ready to take the next step in achieving your savings goals? Stop by a branch today to open a High-Yield Savings Account!
1 https://www.nerdwallet.com/article/finance/data-2023-budgeting-report#:~:text=According%20to%20a%20new%20survey,Americans%20have%20a%20monthly%20budget.
2 Dividend rates are variable and may be changed or discontinued at any time. Current rates can be found at AboundCU.com/deposit-rates. A blended annual percentage yield (APY) is calculated based on balances in each earning tier, and the exact APY will depend on the balance in the account. Dividends paid and compounded monthly. Limit of one High Yield Savings Account per primary member’s Social Security Number. Available to both business and consumer members. Subject to $10 Membership fee if not already a Member.
2 Dividend rates are variable and may be changed or discontinued at any time. Current rates can be found at AboundCU.com/deposit-rates. A blended annual percentage yield (APY) is calculated based on balances in each earning tier, and the exact APY will depend on the balance in the account. Dividends paid and compounded monthly. Limit of one High Yield Savings Account per primary member’s Social Security Number. Available to both business and consumer members. Subject to $10 Membership fee if not already a Member.
