Top pitfalls that cause you to miss your money goals
February 14, 2018
Get further ahead financially by learning from these money mistakes!
Money goals are a great thing to have. Whether you plan them weekly, monthly or yearly, having a target and purpose for your money is KEY for financial independence!
And the term “money goals” sounds so promising! Full of ambition and hope! They're essential to have, and even more important to keep!
Now if you're like me though, as hard as I try, at some point or another, I can slightly stray from my goals. And it's not for lack of trying that's for sure!
No matter how hard I try to stay on track, SOMETHING is always coming up!
Have you ever stopped to question though where the gap is? Despite all the planning you do, where is that area that you miss in your budget, and ALWAYS comes up and costs you money?
If I'm honest with myself, it's probably in my "entertainment" budget allowance.
My wife and I aren't crazy partiers by any stretch! And I like to think we're simple and don't go all-out every weekend. But when I looked long and hard, I realized I forgot to budget for the BIG events. You know… the weddings, the birthdays, the holidays, and the hockey playoffs 🙂 These were the days we'd almost blow our whole monthly budget line in one day!
Now, when we do our yearly budget (check out how we do it in this post), we set aside an extra lump sum of money for these things. That way there are no surprises, and we stay on track.
What’s keeping you from your money goals? I’ve made a list of 6 popular items that may be preventing you from getting ahead!
1. Your budget is NOT realistic
When you sat down and created your budget, did you have wishful thinking that you would only spend $250 on groceries and you blow the budget every month?
Or did you think that you would only go out to eat once with your friend? And instead of ordering something small with water, you ended up getting a pricier entrée and drink?
TRY THIS INSTEAD: Do yourself a favor and be realistic. If you like eating out, then put that in your budget. If you consistently spend $500 on groceries, then adjust your budget. There is no sense in underestimating your expenses to TRY to save more, only to go over them EVERY SINGLE MONTH. See what you are spending and work with a number that makes sense. Be realistic.
Related post: The one thing most people forget when budgeting
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2. No budget set
Maybe #1 doesn’t apply to you because you don’t even have a budget set... tisk tisk. You belong in this category if you buy whatever you like, whenever you want and hope that there is money in the bank. And when there's no money left, you resort to using credit.
You are missing your money goals because you don’t have any. Some months are up, some months may be down, but I liken it to "financial wandering." You might get somewhere, but it's not guaranteed when and how far you'll go.
TRY THIS INSTEAD: Create a BUDGET! Know how much you're bringing in and what you are spending. Even if you're not ready to categorize your spending, just try jotting down what you spend each day. At the end of the month, you will have a realistic idea of where your money is going! Then you can create a budget 🙂
Related post: Why budgeting actually gives you more freedom, not less
3. You blew one area of your budget and gave up on trying for the rest of the month
Ok, so you set a budget, figured out what you spend, and tried really, really hard to stay on track. Then opportunity strikes!
Your friend from out of town visits last minute, and you have a free weekend to go out with them. Or maybe you saw a great deal on the car mats you needed and couldn't resist. Either of these things can push you slightly off your budget that month.
Then the worst happens...
Rather than going slightly over your budget, and try to stay on track the rest of the month, you throw in the towel. You feel defeated and rather than staying on budget the rest of the month, you continue spending with the idea of starting fresh again next month.
TRY THIS INSTEAD: Don’t let one mistake or over-spend throw your entire budget off. If you can, find ways to stay within your budget for the rest of the month. Can you stretch your budget and make it work? (Maybe try a no spend night or week?) If so, then that’s great! If money is tight, don’t feel like you blew it once, so you have to throw in the towel. Get out of this mindset. Push the reset button and challenge yourself to really make it work.
4. Setting too many goals
There are so many goals that people have these days. Some are personal ambitions, while others stem from society’s expectations and keeping up with the Jones’.
Have you set TOO MANY goals? Yes, this is a thing.
Do you want to pay your car loan, pay your maxed out credit card, save enough for a down payment on a house, go on a vacation and take that course? Setting too many goals can create chaos and confusion, not to mention added stress.
TRY THIS INSTEAD: Look at your budget and income. Decide on what’s REALLY important to you and make that your priority. For me, my wife really wanted to go back to school. That meant one less income and stopping any accelerated payments on our mortgage. But paying the mortgage faster was not a top priority FOR US.
***While I just said pick your priority as your goal, I strongly believe that paying off any high-interest debt (credit cards, etc.) should be a priority before doing anything else. Check out this post on why!
5. Impulse spending
Your money goals are created by you and can be thrown off by you.
When you walk into a store, can you resist buying something you don’t need? Do you deal with your stress by spending? Or when you go out to eat, can you settle for just one appetizer?
TRY THIS INSTEAD: Resist those stores, restaurants, and temptations when you are out. If you need to leave your credit card at home, then do that. This all starts with knowing yourself. My wife looooves Sephora, but she knows that walking in there randomly will be too big of a temptation... so she doesn’t do it unless it’s in the budget (yes, we budget for hair and makeup supplies!)
6. Living an inflationary lifestyle
This is slightly different from impulse spending. This is when you get that raise you’ve wanted only to buy then that car you’ve always wanted. Or when you get some extra cash flow spend it immediately on something that won’t get you closer to your money goals.
When you know that extra money is coming in, an inflationary lifestyle means you change your mindset and actually spend more.
TRY THIS INSTEAD: Take the extra money and make sure it's accounted for in your budget. I'm not saying that you have to take your birthday gift money straight to the bank and not do anything you want with it. I am saying, PLAN on what you want to do with it. Maybe you can take half and buy yourself what you want and put the other half towards your money goal.
Related post: Why a high income doesn't guarantee financial freedom
We all have money goals and things we want to use our money for. When you reach your money goal, you will feel a sense of accomplishment. Don’t let distractions or defeat get in your way. Set your sights on your goal and start pursuing it.
Think it through
- How defined are you money goals? Can you be more specific? Do you have too many?
- What's getting in the way of you meeting your budget?
- What can you do differently to stay on budget?
- The one thing people forget most when budgeting
- Why budgeting actually gives you more freedom, not less
- Money saving tips to have a no-spend night (or week, or month)
- Why budgeting is more about goals than dollars and cents
- Why a high income doesn't guarantee financial freedom
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