Avoid Spending Pitfalls
With all the advantages that are evident from
personal budgeting, it is no wonder that more and more people are relying on them to reduce debts and increase
their savings. However, all ‘budgeters’ need to be careful to avoid some common pitfalls that appear
Cut down on your credit
Credit cards may seem like small pieces of
plastic, however they can cause a great deal of trouble for the owners. It is common for people to make unwise
purchases, which they would have avoided otherwise, because they had the credit card in their wallet. The best
solution for many people is simply to get rid of credit cards and begin paying only by cash, check, or debit cards.
You may want to keep one card handy for emergencies, but it is probably best to keep it out of reach, and far away
from your wallet.
Stick to Your Budget
Another problem with budgeting is impatience.
There are financial goals set, but people do not have the patience to complete a savings program. For instance, an
individual begins setting aside money for a new car; however, after a few months they discover the car of their
dreams. Rather than waiting, they make the purchase. This could pose some serious financial strains. Discipline is
a must to prevent impatience from breaking your budget.
Adjust your budget when
Once a person makes a budget, they often fail to
adjust it when necessary. A budget is created using a set of expenses and income figures that are liable to change.
As these figures do change, it is important that the budget changes to reflect the adjustments. There could be some
major deficits if this is not done appropriately and promptly.
Factor in family
Of course nobody forgets about Christmas or Hanukkah, however many people do not consider budgeting for holidays
when creating a budget. Therefore, adequate funds have not been set aside for presents, food, parties, etc. These
items should be factored in and saved for throughout the year.
Finally, many people factor in transportation and
accommodations for vacations in their
budget, however they underestimate money needed for food, entertainment, and spending money. Keep in mind that all
the resorts and tourists areas are double or triple what you would normally pay.
With a little planning, you’ll be on your way to
saving more money than you ever thought possible!