Ah, budgeting. Like it or not, budgeting is the backbone of successful personal finance and the heart and soul of good financial health.

Many of us who have finally found the path to financial health and independence now realize just how important budgeting is. However, obtaining this knowledge is rarely easy. Our stint with budgeting began in 2011 after we started tracking our spending and realized that we were wasting more than $1,000 per month on food.  Oink, oink.  Who knows how many thousands of dollars we let fly out the window before we actually realized the error of our ways and – more importantly – how to correct them.

All along our journey to financial freedom, we made some common budgeting mistakes that we’d like to help you avoid. Here’s a few of those mistakes (and how to avoid them):

Mistake #1: Your Budget Lives in Your Head

Look, I used to think that I was a genius too. “Sure, we can afford that this month,” I’d say to myself after earning a bonus from work. I had all of our “expenses” tracked in my head. Of course, buying one extra item morphed into two. Three date nights a month worked its way into four restaurant meals a week. It didn’t matter as long as the account balance stayed positive at the month’s end. We “budgeted” for all of that…in our heads. Only when we began tracking our expenses did we realize that our imaginary budget wasn’t really a budget at all.

Until you begin using a written budget, money just has a way of disappearing. I know, I’ve been there. So, whether you use the latest budgeting app on your iPhone or good old paper and pencil, write that budget down…and do it today!

Mistake #2: You Are Only Budgeting for Bills

Newsflash: Making sure you have enough money to cover your bills is NOT budgeting. For realsies, I’m glad that you can pay your bills, but budgeting includes a lot more than that. After all, you don’t want to live paycheck to paycheck, do you?

If you really want to make your money work for you, first write it down (see above, yo!). Second, at the beginning of the month, create a “job” for every single dollar you expect to earn by using a zero-sum budget. When you give each dollar a purpose, you’ll begin to find all kinds of money you didn’t even know you had!

Mistake #3 You Aren’t Being Realistic

I know it is fun to find ways to lower your car insurance premiums or cut down on unnecessary bills like cable TV. Trust me, I get it. I geek out every time I find a few extra bucks we can shave off my phone bill or discover a new way to free up some cash. However, your budget has to be realistic when it comes to how much you think you are going to spend. For example, while $1,000 a month for food is way to much, you probably aren’t going to get by on $20 either. In other words, look for ways to cut spending, but don’t set yourself up for failure by setting unrealistic expectations.

Mistake #4 You Aren’t Planning for Any Fun

When you first start budgeting, it is easy to get your monthly expenses down on paper and tell yourself that you don’t need any “fun money” this month. Theoretically, that sounds great. Unfortunately, you may find that you do need a little fun moneyWe all deserve to enjoy ourselves occasionally, right?  In order for  your budget to work, it must be inclusive- it has to have wiggle room for things that pop each month, including your need to be entertained.  Got it?

Learning how to create (and live by) a zero-sum budget has truly changed our lives.  And the good news is, it can change your life too.  So create a zero-sum budget of your own, be realistic, and give each dollar you earn a “job.”

Once you start using a monthly budget, you may find that you have a lot more money than you think.

What budgeting mistakes have you made? What have you done to correct them? Fire away in the comments below!