5 Common Mistakes People Make When Spring Cleaning Their Budgets
Written by
Adam Palasciano
Edited by
Jenna Klaverweiden
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Budgeting is crucial. Why, you might ask? It’s because it can unlock a long-term future of financial security. Budgeting allows you to see exactly where your money goes every month — from your monthly housing expenses and savings to groceries, utilities, debt and more. Fortunately, the overwhelming majority of Americans are doing this.
According to Debt.com’s seventh annual budgeting survey, as of 2024, 90% of Americans said they were budgeting. At the same time, 89% of Americans said budgeting helps them get out of or stay out of debt.
While this is welcome news, it’s still possible to make mistakes when it comes to budgeting. Here are five common mistakes people make when spring cleaning their budgets.
Also see 35 useless expenses you need to slash from your budget now.
Forgetting About Savings
While annually revisiting your budget is crucial, including your savings strategy is necessary, Edward Goldstein, CFP with Financial Life Planning, wrote in an article.
For example, if you have an automatic monthly deposit set from your checking account to your high-yield savings account, consider increasing that monthly amount to adjust for inflation and to benefit from more compounding. Besides saving cash, you can also search for sales or deals before making any purchases so you can put more money back in your wallet.
Not Paying Down or Eliminating Debt
Eliminating debt should be top of mind when cleaning up your budget this spring. It should go without saying that debt creates a financial drain by eating a hole in your bank account.
Consider using the 50/30/20 method when budgeting, which allocates 20% of your budget toward paying off debt, per Goldstein. Also, as LifeStore Bank advised, be sure to focus on paying off higher-interest debts, like auto loans and credit cards, or paying off your smallest debts first.
Not Seeking Out Professional Financial Help
You may think you know it all, but in reality, you probably don’t. According to Goldstein, one key mistake people make when spring cleaning their budgets is not getting professional help.
Consider hiring a financial advisor who can assist with creating a comprehensive financial plan that includes both short-term and long-term goals. They can not only help you with your annual budget but also provide you with up-to-date insights into economic forecasts and market trends and assist with investment strategies and retirement planning.
Not Being Aware of Credit
If you close too many credit accounts or credit cards at the same time, this could hurt your FICO credit utilization component score, according to Goldstein. As a result, that could lower your overall credit score.
Additionally, as per LifeStore Bank, it’s important to review your credit report for errors or inconsistencies. Any unaddressed mistakes may cause problems later on, especially if you’re trying to get a loan.
Forgetting About Unnecessary Subscriptions
We all pay for so many subscriptions: Netflix, Hulu, Spotify, Amazon Prime and more — the list goes on. In fact, according to CNET, the average American pays over $1,000 each year on subscriptions alone.
It’s very easy to subscribe to a service, stop using it and then continue paying for it without realizing it. So it’s critical to review your bank statements to identify any unnecessary recurring charges, according to Goldstein.
Then, be sure to log in to your accounts and cancel all the unused subscriptions you’re still paying for so you can free up extra cash to pay down debt or add to your savings.
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