Creating a budget is important, but let’s admit it, it can sometimes feel like a high-wire act. We all make a few missteps along the way, and that’s normal. Here are some mistakes to avoid when budgeting:

1. Not tracking actual expenses
   Many people estimate their variable expenses but forget the most important part: tracking their actual expenses over a few months to adjust the budget with accurate figures. A good budget is one that holds up to your reality!
2. Omitting occasional expenses
   Forgetting non-regular expenses such as gifts, vacations, car maintenance, etc. These costs, even if they don’t occur every month, need to be taken into account and, most importantly, planned for.
3. A static budget does not exist
   A budget is dynamic. Circumstances change, as do income and expenses. It is necessary to regularly review and adjust your budget.
4. Too much optimism can ruin your budget
   Underestimating expenses or relying on future wage hikes is like believing in Santa Claus all year round. A successful budget must be realistic and not too strict. It’s a marathon, not a sprint.
5. Nothing for savings
   Leaving out a category for savings or an emergency fund in your budget is like going on a trip without a return ticket. These elements are crucial for dealing with unexpected events and achieving long-term financial goals.
6. Not taking into account small expenses
   Daily coffee or snacks may seem like peanuts, but over a year, they add up significantly. Don’t forget to include them to have a complete view of your financial situation.
   
7. Need or want, that is the question
   Not making the distinction is like giving the keys to the store to your spendthrift side. A little restraint and a lot of caution are key!
8. Everyone on board
   All family members should be involved in creating the family budget. This way, you consider everyone’s needs, and it’s an excellent educational exercise for children, young and old.
9. Relying on uncertain income
   Counting on bonuses, overtime, or other types of non-guaranteed income can lead to problems if these income sources don’t materialize.
10.  Ignoring debt
    Ignoring debt in the budget is like closing your eyes to a countdown. Rapidly repaying personal debts can be a significant source of savings that can benefit you rather than the bank.
11. Tools and apps, secret allies
    Several tools and apps can make the budgeting process much easier in terms of calculations and to make sure your list of expenses is complete. Ignoring them is like cooking without an oven! We have a Budget tool, but there are others on the web. Choose the one that suits you best.

If trying this experience scares you, don’t panic. There’s no need to plan everything immediately. You can start with a few key expenses and then gradually expand. There will inevitably be mistakes, and that’s normal. The important thing is to make adjustments along the way.

Give it a try, and rest assured that our personal finance advisors are here to answer your questions and assist you if need be. The consultation can be done by phone or in person. It’s free, confidential, and without obligation.

By Pierre Fortin
Jean Fortin & Associés
Personal Finance Advisor
Licensed Insolvency Trustee