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Top 10 Budget Busters
by Michelle Jones
Many people make sincere attempts to set up a household budget and get
themselves together financially, but too often these attempts fail. And
for those with the most difficult financial circumstances, it may take
several attempts to finally create a plan that works.
We've talked a lot about how to get started with budgeting (and back on
track), but let's look at some of the budget busters that may be
throwing us off track in the first place.
1. Living on Two Incomes
When a couple first starts out, they often have two incomes and will set
up their household budget based on that combined total. But as soon as
the first financial crisis hits and one of those incomes is reduced or
even wiped out, everything can fall apart. The solution; couples should
make every effort to live on one income. Use the second income for
savings and extras, many of which will be needed due to the additional
job.
2. Not Enough Money in Savings - for Emergencies
This should be obvious to everyone, and recent financial reports reveal
that we're finally starting to set more and more money aside in savings
accounts. congratulations! However, there are still many of you out
there who haven't even opened an account yet. So, when your next
paycheck arrives, just DO it!
3. Spending More Money than You Really Need To
Ouch. I know that one hurts. The fact is, many of us are still spending
too much money, even though we know better! There are lots of things you
can do to control spending, if it's a constant problem for you then make
yourself some rules and stick to them. Some of your rules might include:
"I won't buy anything that isn't on sale - at least 40% off" or, "I
won't buy anything the first time I see it, instead I'll wait for at
least 48 hours - or a week - to see if the 'need' passes," or even
better, "I won't buy anything that isn't on my 'need' list!"
And families can keep each other on track - "I won't buy anything that
(name of family member) doesn't agree we should buy." That one will cut
out a lot of extra spending, and remember, it goes both ways!
4. Not Keeping Track of the Extra Money You Do Spend
If you haven't tried this yet it may be the biggest step you will take
in keeping your finances under control. For 30 days, write down
everything you spend money on, and keep doing it as often as needed;
every month, once a quarter, and then down to once a year if you're
staying within your budget.
If you get off track, start recording your expenses every month again.
Keep a small notebook in your purse or car, and log every purchase,
every day. It may seem trivial, but it works.
5. Putting Too Many Purchases on Credit
Boy is this easy to do if you're not paying your bill in full each
month. A few purchases can easily add up to hundreds - or thousands - of
dollars. Keep track of your purchases when using credit, just as you
would when using your checking account or cash.
6. Giving Money Away When You Can't Afford It
This subject is difficult to discuss because the final decision must be
left up to the individual - each person ultimately must do what he/she
feels is the right thing to do, at any given time. Generosity is
certainly a worthy trait, and one we should all continue to improve.
However, if you continue to give money away that you can't really
afford, as Dr. Phil McGraw would say, "How's that working for you?"
If it's working, great! If it's not, consider adjusting your giving, or
increasing your income so you can continue to be so generous. You can
also give your time and the material items you no longer need to those
who do. That can be just as valuable as money, if not more.
7. Buying People Gifts When You Can't Afford It
This area of spending is similar to #6 above, but goes a little deeper
than just being generous. I'm referring mainly to the annual birthday
and Christmas presents we purchase for our friends and family. If it's
stretching your budget or keeping you in debt, make an effort to scale
back this year, and every year.
And this includes the lavish birthday parties some parents feel they
must put on for their children, even giving away 'goodie bags' that
value $10, $20 or even more. When I was a kid birthday cake and ice
cream was wonderful enough. It's possible, by handing out 'goodie bags'
to all the party attendees, we - as a society - are teaching the
children to expect something in return whenever they give a gift. Who
started this madness?
8. Accumulating Too Many Monthly Bills
It may not seem like much, but $20 here, $15 there, and another handful
of monthly expenses everywhere can add up to one big mess. Just as
keeping track of your monthly spending will benefit your budget, keeping
your monthly bills in line will help tremendously. That's what creating
a budget does, your monthly income must cover the outgo, and if it
doesn't, you cut back.
9. Not Earning Enough Money
If you feel you're not earning enough money for the work you do, you
might consider asking for a raise or promotion, or, looking for a better
job. If these options are not available to you at this time, work on
improving your skills and value to your employer so they will be soon.
Taking on a temporary second job might help as well, just don't create a
schedule that you can't handle.
10. And Maybe Our Worst Budget Buster of All. Not Creating a Budget in
the First Place
"Never put off till tomorrow what you can do today". Don't let another
day go by without gaining control of your finances... it's just money
Copyright 2003 by Michelle Jones
Michelle Jones is the editor of BetterBudgeting.com. Subscribe to her
monthly newsletter, The Money-Saving Tips Ezine, at
http://www.betterbudgeting.com/subscribe.htm
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