The Top Ten Budget Mistakes
It will save you money
Making a budget is essential for your financial well-being. When you have a plan in place, even the roughest of recessions won’t be able to pull you under. But beware, purveyors of payday loans – if you aren’t careful, you can fall prey to one of the top 10 budget mistakes.
Having two household incomes – because you need them
If there is a second income in your household, it’s nice to be able to use that one for savings. That said, too many people have a second income to overextend their credit, especially when buying more home than they need. What if one income dries up? Live within the means of only one income and you will be more economical, and safer.
Not putting money away
Savings accounts, college funds or even rainy day funds. Whatever you are intending to use it for, but you need to set aside a small portion of every paycheck aside. It pays to be prepared!
Overspending
Will that hole in your soul really be filled with a new television? If the old one works just fine, you should think before thinking about replacing it. Impulse buys can be lethal, so make sure your budget is about what you really need every month. There should be some money earmarked for fun, but you have to be disciplined and stay in the boundaries. When you shop, look for sales and the best deals.
Not recording expenses
When your budget is young, this is essential. Record purchases in the register of your checkbook, Smartphone, or a notebook, and create visual proof you’re following your budget. Eventually, you’ll get the hand of it and won’t need to write everything down at once, but if you encounter trouble, don’t be afraid to write it all down again.
Going credit crazy
This is very symptomatic of overspending. If you don’t have the money for something, don’t be buying it. Using credit makes it too easy to overspend, and long-term revolving interest is very expensive. If you have to use credit, try to pay it off as quickly as possible and not carry a balance.
Being too charitable
This one might sound odd, but it’s obvious, isn’t it? There’s nothing wrong with generosity, but your own bottom line comes first.
Going overboard with birthday parties
Parents of young children may know about this one. I’m not talking about how much to spend on junior’s gift, but on the party guests. Giving goodie bags is a great practice for kids, but is it actually necessary? Cake, ice cream and games should be enough.
Too many bills
This is why it’s useful not to go crazy with credit cards. Sure, housing and utility bills are generally unavoidable, but do you need eight or nine credit cards, too? A too many bills can lead to errors and omissions, not to mention more money you’re paying out.
Being afraid to ask for a raise
If you are valuable to your employer, make sure they know. If you don’t think your pay is consistent with what others in your field are paid, discuss it with your superiors. If you are valuable, an employer will consider it. If your employer won’t do it, consider improving your skills and education so that you can perhaps find a better job.
Not creating a budget
A person without a plan is a person who will soon be parted from their money. Payday loans are a tool you can use as assistance, but they are not a long term solution, whereas changing habits and better budgeting are.