In order to save money and improve your finances, you must come up with a budget. But more importantly, you must stick to it. Many people create budgets they think will work, but despite their best efforts and intentions, they fail to see it through. This common problem happens for a number of reasons, but avoiding these 4 common mistakes will dramatically increase your chances of success.

Common Budgeting Mistakes

There are a few primary budgeting mistakes people make that can lead to a budget’s eventual demise. First, they do not create a detailed budget, meaning the budget is too vague and it does not account for extra expenses and unforeseen costs. These kinds of unforeseen costs can ruin the whole budget. Second, they simply lack the necessary discipline to stick to their own budget. Third, they find that the budget is too tight and while it looks good on paper, it is simply not practical in reality. In order to create a detailed budget you can stick with, it is best to plan extensively, but also practically.

Mistake 1: Failure to Start from Scratch

The first step is to start from scratch. If you already have a budget, scrap it and start over. Take out a notepad or open up a document on the computer and write down every single bill you must pay, such as your mortgage, utility bills, and any loans you may have. Using old data or building from a budget that’s already failed will likely give you the wrong insights into your spending plan.

Mistake 2: Underestimating Expenses

Once bills are out of the way, turn your attention to other necessities, such as health care, food, and gas. It’s important not to underestimate how much you spend in these categories. Many people encounter problems in their budgets when they underestimate their spending. When creating a budget, you may think that you can cut down on your food and gas expenses, but it’s important to allot yourself a realistic amount of money for these bills. Otherwise, you’ll overspend and hurt other areas of your budget in turn.

Mistake 3: Forgetting Discretionary Spending

Expenses such as the mortgage and food costs simply cannot be avoided, but non-essential costs such as clothing, entertainment, or a night out are still important. Cutting out these types of expenses completely often seems like a good way to save money, but if you don’t treat yourself every once in a while you might end up struggling to stick with your budget. On the flip side, be happy, but don’t go overboard with discretionary costs. Keeping them to a minimum will help you to save some money and put you in a better financial situation.

Mistake 4: Forgetting Unforeseen Costs

Unforeseen costs can include home repair expenses, veterinary care (if you have pets), and auto-repair costs. Although you can never predict when these costs may arise, it is important to be prepared by planning for the unexpected. Failing to do so is a sure way to ruin your budget the moment one of these unexpected costs rears it’s ugly head. Ensure that each month you have some money within your budget to cover any of these unforeseen costs, or even better, keep a separate emergency fund to draw from whenever this happens.

Once you’ve gone through all of your expenses in detail, you can create a clear and detailed budget—one you can finally stick to.

How have you built a usable, successful budget? Are there other important mistakes you’ve made that should be included? Post them in the comments section below!

Jessica Bosari is a PerkStreet Customer Columnist, as well as the Site Manager and Editor for billeater a blog with money-saving tips to lower your bills. When she’s not gathering money-saving tips, Jessica is feeding her geeky side with sci-fi movies, tech gadgets, useful apps and productivity tricks, just to keep things interesting. Read more of Jessica’s great financial advice on Perkstreet’s blog, or view her other money-saving tips at billeater.com.