Call Us!

(844) 845-4219

Biggest Monthly Budget Missteps

Monthly Budget

Making a monthly budget sure seems like it should be straightforward enough. Just decide where you’ll spend your money, then follow the rules you made for yourself. Although it should be easy, it just isn’t!

Monthly budget missteps can do everything from landing you with a bunch of credit card debt to undermining your retirement. With prices rising and costs harder to predict, budgeting gets harder for everyone. Ultimately, your monthly budget is about deliberately deciding how to spend your money

You might feel like making a budget adds to financial anxiety. When you get it right though, you’ll make a difference in your credit score and financial future. To help get it right, here are some common budgeting mistakes to avoid.

Not Simplifying the Tracking Process

One huge mistake people make is to spend hours developing a budget, only to throw it into a drawer and never look at it. Your budget is a plan. You must check your actual spending against your plan to manage your money.

Look through your bank statements to see what products or services you spent the money on. Then, use a tracking system to follow the patterns. Any tracking system is fine, as long as you’ll use it.

Many people use spreadsheets. Some keep notes on paper. There are also lots of apps available. The most important thing about your tracking system is that you like it! A complicated tracking system is demotivational and makes it less likely you’ll keep going with your budget.

Not Setting a Financial Goal

Your financial goal works like the light at the end of the tunnel. Monthly budgeting sometimes requires sacrifices. You might quit if you have nothing to look forward to on the other side of the sacrifice. Goals provide motivation and get us through rough patches. It’s no different with finances.

Not Using Actual Spending to Create the Budget

There is some temptation to create a budget from memory or by estimating monthly expenses. This can cause real trouble. Ballparking numbers can easily create errors of several hundred dollars a month and thousands every year.

Not Including All Your Expenses

When you miss some expenses on your budget, you end up short by the end of the month. Check your statements to list your expenses.

Irregular costs are the hardest. You may find that a special account for these expenses works best. Put aside money every month for annual or quarterly expenses so you don’t go short when the payment is due. Remember payments like:

  • Insurance
  • Subscriptions
  • Home/car repairs
  • School tuition and fees
  • Extra child care
  • Holiday shopping
  • Membership dues

Not Including Savings

Often savings end up in a category called “if anything is leftover at the end of the month, I’ll put it into savings.” It’s no surprise to many that usually, there isn’t much leftover. By building short-term and long-term savings into your budget, you can make a bigger dent in your financial goals. Automatic transfers on payday are an excellent way to put aside money. Move the money on payday, so you don’t even miss it.

Not Including Relevant People

Budgeting is difficult enough for one, but add a partner, and things get more complex. Communication is key to limiting overspending and sticking to a budget.

Set up systems like a budgeting app and make a payday routine to discuss the budget for the next pay period.

Not Reviewing and Adjusting Your Budget Regularly

After tracking every penny for a few months, you should find you are making fewer monthly adjustments. You’ll still encounter seasonal and annual changes.

Plus, don’t forget to review your monthly budget whenever your financial situation changes. Whenever you spend extra or receive extra, use your budget calculator to figure out what changes need to be made.

A quick, regular budget review is a good idea, even without specific changes. A few minutes on payday and a more thorough review quarterly works well for many. Choose a frequency that you’ll stick with!

What to Consider When Reviewing Your Budget

There is more to reviewing your budget than comparing what you spent to what you budgeted, though that is the first and most important part of the review. After that:

Look for Patterns – What budget items are regularly over? Under? Why?

Miscellaneous Expenses – What’s in your miscellaneous category? Is any single expense large enough or frequent enough to deserve its own?

Monthly Income – Have you got a tax return? Extra GST? Annual bonus from work? More than your regular net income?

Debt Payments – Are you on track? Is there any way to shorten your repayment schedule?

Accounts and Cards – Do you have the right bank accounts? Are you paying too much in fees? What about your credit cards? Can you negotiate a lower interest rate? Talk to your credit card company or financial planner.

Long-term Savings – Are you planning to purchase a home? Adding to your retirement?

Seasonal Expenses – Are you on an equal payment plan for your utilities? If so, when do you have to make up the difference?

Unexpected Expenses and Impulse Purchases – You can plan for the unexpected with an emergency fund. Experts suggest at least 3 to 6 months of living expenses.

Budget for Fun – For example, going to a restaurant for a date night does NOT come out of your food budget! Put aside money for whatever makes you happy. Plus, build in rewards as you meet your budget goals.

Think about monthly budgeting as a foundation for financial well-being. Over time, with regular reviews, you can build the momentum you need. Creating and maintaining a budget ultimately lets you live the life you want.


Effective monthly budgeting is critical for making financial decisions with confidence. Keep your eye out for these common mistakes to stay on course. If your debts are getting in the way of being able to stick to a budget, contact one of our credit counsellors for help.

Share this page



Consolidated Credit Canada