Top 3 Budget Blunders – And How to Work Around Them
Creating a budget is one of the most common and popular ways to save money, eliminate your debt, and plan ahead for that adventurous vacation you are organizing, but sometimes, planning every single expense, down to your last latte, can backfire. Maintaining a strict budget is a great way to cut out discretionary purchases, track your progress and make sure your bills are all accounted for – but this type of strategy leaves little room for other sudden or seasonal expenses that pop up.
When you’re busy fulfilling your day-to-day obligations, it’s easy to forget about buying a gift for your nephew’s birthday or chipping in for your company’s potluck lunch. These costs may be small, but when you’re on a strict budget that controls your spending down to the penny, you may be forced to dip into your savings or turn to credit. So each month when you’re formulating your budget, make room for common expenses that are easy to forget.
1. Birthdays, Wedding Gifts, Parties
Between gifts, food, and the enviable dress, the costs of attending an engagement soiree or family function can be more than you bargained for! You can avoid being derailed by checking your smartphone and/or calendar to see what your monthly obligations are ahead of time so you can plan. Your budget may change from month to month depending on what you have going on, so if you see your mother-in-law’s birthday is coming up, re-organize your budget.
The rule of universe seems to be that as soon as you get your finances in order and start to save money, something breaks. If you haven’t already started an emergency fund to cover the costs of auto repairs, medical emergencies or computer crashes, now is the time to do so. The consensus on how much your emergency savings should amount to seems to be enough to cover three to six months’ worth of living expenses. This can seem daunting at first, but if you start small by transferring over a percentage of your paycheck into a savings account, you will accumulate your safety net before you know it.
The holidays can be one of the most expensive times of the year and leave us feeling financially drained when it’s all said and done. To avoid the fatigue and debt hangover, carve out a portion of your budget each month that is solely devoted to your holiday spending. You may feel a tight pinch now when you put a percentage of your paycheck into a separate holiday fund, but you’ll enjoy the payoff when you’re debt free next January.
So bee smart and efficient with your money and you won’t get stung by the unexpected!