We are taught to never meet our heroes. Over the last couple of years, I have enjoyed reading the biographies of great leaders. These include Steve Jobs, Benjamin Franklin, John Adams, and Albert Einstein (yes, I notice the lack of females on the list). What you find after reading these biographies is that we are all human, and we all make mistakes.
When families assume they need to be perfect or predict the future, the thought of budgeting can cause a lot of stress. The same can be said about budgets that are meant to be set in stone, and I don’t agree with those.
Here are some common budgeting myths and mistakes that deal with the assumption of perfection. Remember, Mike Tyson said, “Everyone has a plan until they get punched in the mouth.”
We Forgot Something
Have you ever forgotten anything in your entire life? I can’t count the number of times we have come home from the grocery store and missed an item on the list. It can drive you mad to be so close to perfection, but it happens. When you start budgeting, you will make mistakes, too.
As I mentioned in the myth about budgeting being too hard (Budgeting Myth #2), it takes 4 months of budgeting to feel comfortable with the process. The first budget you create will not have everything in it. You will forget something, and you will need to edit the budget. This…is…normal. Believe me.
As you continue to budget, you will learn to look ahead for birthdays, anniversaries, trips, holidays, and much more. You will get better as you go, and don’t let forgetting something frustrate you.
Budgets are set in Stone
One of my favorite phrases from the white collar world is the phrase, “living document.” This name is given to any piece of paper or file that will change over time. Budgets are the same way and shouldn’t be set in stone.
For example, your budget for December will not be the same for February. December is a longer month, so you might get an extra paycheck. It is also the holiday season, so there are gift expenses. Don’t forget all the extra travel and food costs.
When you look ahead and create next month’s budget, do your best to plan for what money is coming in and what money is going out. And…
Surprises, Good and Bad
…you can’t predict everything. There will be surprises—both good and bad—that will cause you to edit your budget. A window gets broken. You win $150 at a 50/50 raffle. The “check engine” light comes on. Your boss surprises you with a bonus.
In these situations, it is best to have an emergency budget meeting. There’s no need to redo the entire budget. If you won $150, decide as a family what to spend it on (spending can include reducing your debt or increasing your savings). If the car costs $400 to fix, take $400 from other items in the budget or your emergency fund.
It’s okay to edit your budget. Don’t throw away the old one and start from scratch.