Following a budget is one of the most effective means of tracking your finances and meeting your money-related goals. Without a budget, you might struggle to save money, keep up with your bills, and stay out of debt. And the more accurate your budget is, the more useful it will be.

If you’re going to stick to a budget, you need to make it as achievable as possible. Avoid major budgeting mistakes, and you’ll be better-positioned to spend responsibly and meet the goals that are most important to you.

With that in mind, here are three budgeting mistakes that could derail your efforts to stay on top of your finances.

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1. Not updating your budget periodically

When you first sit down to set up your budget, the best you can really do is base your numbers on your current income and expenses. For example, if your rent is $1,400 a month, your student loan payment is $350 a month, and your car payment is $300 a month, it makes sense to factor those numbers into your calculations. But what happens when your rent increases to $1,450, or you refinance your student loans and lower your monthly payments by $75 in the process? Suddenly, all your numbers are off. 

That’s why you really need to make a point of updating your budget as your expenses change. Otherwise, it just won’t be accurate. The same holds true if your income changes, for better or for worse. 

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2. Not leaving room for savings

Having a budget can help you avoid spending down your entire paycheck on a monthly basis, thereby enabling you to save money consistently. And make no mistake about it: You should be saving consistently, whether it’s to build an emergency fund or make progress toward amassing a retirement nest egg. Therefore, don’t forget to include a line item in your budget for savings, because if you don’t, you might forget to set that money aside. 

3. Not factoring in once-a-year expenses

Many of us have bills that only pop up once a year. For example, it’s not uncommon to pay a life insurance premium in one fell swoop, or to pay for a professional license renewal once a year. Or, you might renew a magazine subscription or warehouse club membership once annually. 

Some of these expenses might be smaller in nature (like the latter two), but others, like a life insurance premium or license renewal, could be more substantial. That’s why you really need to factor these costs into your budget. Many people, however, forget to do so, and wind up with larger bills that they’re forced to scramble to pay. 

Imagine your life insurance premium costs $1,200 for the year. If you don’t set aside $100 a month for it, you might struggle to come up with that cash when your bill is due. But if you include that expense in your budget, you’ll remember to allocate money for it every month.

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