Trying to restore your budget for 2026? Check out these budgeting mistakes to avoid!
The following is a guest post by Jessi Fearon:
I can’t believe it’s already 2026. But we are here! Chances are you’ve created a ton of goals this year, and you’ve probably already kicked them out. That’s great!
But I also know, as I’m sure you do, that keeping a New Year’s Resolution going throughout the year is very difficult. After all, we don’t know everything that life will throw at us this year. We may experience unexpected heartache, immeasurable joy, or a combination of both.
And since many of us (myself included) are setting financial goals for the new year, I thought I’d share a few mistakes that I see all the time in my coaching clients and that I’ve made many times in the past.
3 Budgeting Mistakes to Avoid:
If you want to stick to your financial goals this year, watch out for these budget mistakes as the year progresses!
1. Not Tracking Daily Expenses.
Yes, I know this one is tedious and won’t always be fun, but I can’t stress enough how powerful it is to track your daily expenses!
This is a must if you want to control overspending! Nothing forces you to be more aware of how you spend your money and where your money is going than keeping track of all your expenses. I have a budget planner from Erin Condren to track ours, but you can use anything — a sheet of paper, a note-taking app on your phone, or a spreadsheet.
I’m a big fan of manual tracking (ie, I don’t rely on an app to do it for me) because, in our digitized world, we’re so cut off from our money. Many of us don’t even write paper checks to pay our bills anymore — we do it all online! So there is a bit of a disconnect between our bank accounts and our minds. The best way to fix that is to track how we use it ourselves.
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2. Reducing Unexpected Costs.
I get it — they are unexpected! How can you recognize unexpected expenses?! But is it really that unexpected? 🤔 Here’s the thing: if you drive a car, there will be maintenance costs you have to pay throughout the year if you expect to keep that car running for a long time. I mean, the oil won’t change itself! (I drive a 23-year-old car, so trust me, I know firsthand how important it is to keep up with regular maintenance to ensure the longevity of your car.)
It’s the same with Christmas – if you found yourself not ready for Christmas last month, guess what? It’s time to prepare for Christmas NOW so you don’t find yourself in that predicament again this year.
If you own a home, you should keep up with regular maintenance to ensure that you avoid any major expenses. After all, taking care of our cars and homes (like our bodies) prevents major emergencies from happening later.
Those expenses don’t necessarily have to be unexpected. They are there the price of ownership. The same goes for children and pets. If you have pets, you know that they will need to go to the vet at least once a year to get a shot, and they will need flea and tick medication and food. For kids, you know there’s bound to be a birthday party or two, and there’s probably going to be field trips, sports, piano lessons, and any number of other things coming up.
What is the solution? Sinking Funds. You don’t need to set up a Sinking Fund for everything right now. But I suggest you make a list of all the expenses that usually interfere with your plans (like car maintenance, baby related things, Christmas, vacations, etc.) and order them first. For example, I would suggest prioritizing a car or home maintenance rather than saving for a vacation.
Set a threshold amount — the minimum amount you want saved in that account. It can be any number you’d like, but I suggest at least $1,000 for home or car repairs. Even if that doesn’t cover the total cost, it will help offset it. Then, when you reach your limit, stop contributing to that Sinking Fund and move on to the next one on your list.
3. Ignoring the Importance of an Emergency Fund.
Okay, I know this is a weird thing to put last, but this is the one that tends to fail people the most. You NEED an Emergency Fund — negotiable. Seriously, it’s a necessity. Your Starter Emergency Fund should be at least one month’s worth of living expenses. Your Emergency Fund is your safety net when life takes a turn for the worse. Folks, I always ask how I pay for car repairs that cost more than the car’s sinking fund. The answer is your Emergency Fund – that’s what it is. There is no way to pay for your oil changes. It is there to pay for the electricity that suddenly went out.
Your Emergency Fund will keep you going when the going gets tough, so take it seriously and make saving an Emergency Fund a priority this year. (You can take a baby step to get started with our $100 Savings Challenge!)
These are the most common budgeting mistakes I see (and that I’m guilty of!), and I believe that if you work on just these three things this year, you’ll end 2026 in a better place financially than when you started!
Jessi Fearon is an Audible Bestseller in 2023, Good Money Traveland a Certified Financial Coach who specializes in helping families learn to manage their money well. She is also a homeschooling mom to three kids and a furry mom to two dogs and an aggressive cat. Jessi and her family live in the North Metro Atlanta area.
Additional Budgeting Help:
What budgeting mistake are you most likely to make? Do you have any advice on how to avoid them? We’d love to hear in the comments!
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