There are many things that can sabotage a budget. However there is one common budget mistake that is sure to wreak havoc on anyone’s budget. In fact you can spend hours every day creating the best budget the world has ever seen, but if you forget one simple detail your budget is worthless.
Here it is– tracking each and EVERY expense.
If you don’t have a way to capture every expense you make – yes even that $1.25 energy drink my husband occasionally buys on particularly slow nights at work—your budget will fail. At the end of the month your budget may balance on paper, but in real life it won’t. You will forever be wondering where the money went or worse yet, you won’t even notice it’s missing.
I realize that this seems a little strict, but if you don’t keep track of all expenses you will not have a realistic handle on where your money is going. This is he biggest budget mistake.
The only way to make sure you track all of your expenses is to keep ALL receipts. In cases where you don’t get a receipt (such as a contribution to a work gift) write it down on a slip of paper.
How you fix this problem:
Get a receipt collection box.
To eliminate this common budget pitfall you need a box, basket, etc. that you can put all of your receipts in. It should be located permanently in one place in the house known to everyone. Then when you come home from shopping you drop your receipt in this location.
From there, whomever takes the lead on the budget will update the budget form (paper, Quicken, Everydollar) when they are next working on it. Updating the budget should be done multiple times throughout the month so there is no question how much money is left in each budget category.
This system has worked well for us for 11 years.
Yes, we have in fact been collecting receipts in our house in this way for 11 years next month—the day we got married. For anyone feeling pity for Brian for unknowingly marrying a hardcore budgeter, don’t. He saw the wedding budget so none of this should have surprised him.
We do in fact know where every penny of our money goes.
Our first receipt collection box was actually a Mickey Mouse- shaped tin we received on our honeymoon. It was delivered to our hotel room full of snacks from Brian’s coworkers. Upon our return home it found a prominent location in our bedroom where we both knew to put receipts. This receipt collection box served us well until just a few months ago when I decided to update our system.
Now we have a “Sunday basket” with a file pocket for receipts. It works the same, but takes up less space and is organized with our other weekly paperwork that needs to be dealt with.
At least weekly I update our Everydollar budget with the receipts from the folder. After receipts have been entered into the budget they are thrown away. I know you might have been thinking I’ve saved receipts for 11 years – surprise we don’t!
Don’t worry if you sometimes have to offer gentle (I try to keep them gentle at least) reminders to write down expenses that didn’t generate a receipt. We do this in our house frequently. You can avoid this budget mistake by following these tips.
Tips to avoid the biggest budget mistake
- Always, Always ask for a receipt with every purchase.
- If you can’t get a receipt grab a scratch piece of paper. Write down the amount and what it was for.
- Put receipts in your wallet with your money and then take them out every time you go home
- Every time you spend money it necessitates a receipt.
I promise you if you did not keep track of all of your receipts previously and you start doing that now you will “find” money that you didn’t know you had. It will be hard at first, but stick with it.
I got my container for the Sunday basket from Michael’s in January during a huge storage sale–they are not currently selling them.and I have been unable to locate them online either. If they sell them again at Michael’s look for “Cre8ted Space Storage Bins.” If you are going to purchase a “Sunday Basket” amke it’s not too big, is wide enough to hold file pockets, and has handles. It is much easier to use when you can just pick it up by the handles and go to wherever you plan to work.
The file pockets I use and LOVE are Smead brand and the best price I found was on Amazon.
I did spend some time price-checking these. I use these file pockets for a lot of things around the house. They are in my home office, my work office and the Sunday basket.
Smead Poly File Jacket, Straight-Cut Tab, 1″ Expansion, Letter Size, Assorted Colors, 10 per Pack (89610)
If you already have a receipt collection box what is it and where is it stored in your house?
If you don’t have one what is holding you back from doing it? Don’t fall victim to the biggest budget mistake that can be avoided.
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