Budget. It’s a word we hear often and one that some of us try to avoid. Creating a budget is essential in gaining hold of finances. One thing to keep in mind is that a budget is ever changing. As our lives change, accidents happen, emergencies come about, raises occur and so on, our budgets should be adjusted too. It can be frustrating to create a budget only to have it bust from an unplanned event.
To help you plan, here are some of the biggest budget busters:
No Emergency Fund
It is inevitable, life has it’s bumps and curves. Make sure you have an emergency fund in your budget. We can’t predict when the water heater will go out or when the the car will need new tires. Putting money aside each month for these unplanned events will help soften the blow. Also, make sure to keep up on the maintenance of your vehicle and home. Doing some preventive work and maintenance will prevent future problems.
We all know that eating out is costly. Preparing meals and packing lunches is so much more cost effective but it takes planning. Sit down each week an plan out your menu for the week. A menu will prevent the inevitable question “what’s for dinner?”. It will also lesson the temptation of eating out. If you do like to eat out, plan for it in your budget. Maybe allow one meal a week out and make sure you take a dining out coupon along to keep the costs low.
Purchasing items that are not in your budget is a quick way to get in financial trouble. Unfortunately credit cards are easy to obtain making it very tempting to buy, buy, buy. Be smart with your purchases. Only buy items that you need and can afford. Using cash instead of a credit card will help insure that you are not going over budget. If you do have credit card debt, make sure paying them off is a top priority when budget planning.
If you do use a credit card to take advantage of miles or points programs, make sure to pay off the full bull amount each month. If you pay your credit card off each month, you will avoid paying interest which can quickly add up.
Have a system in place for paying bills in a timely manner. Late fees are usually pretty hefty. For payments that are reoccurring each month consider setting up online banking. Most banks offer free online banking and payment scheduling that make organizing your bills easy. Scheduling reoccurring payments saves time and it ensures that your payment will arrive on time.
We all need to let loose and enjoy life. Entertainment is a necessity in most of our lives. If you need to make budget cuts though, entertainment is one area that can be adjusted. Take a look at your entertainment bills. Are you paying a high fee for the top satellite package? Consider subscribing to a lower priced package. Also a call to the satellite provider could net you a lower bill. Negotiate a better price or switch companies altogether.
Another option is to rely on free entertainment. The public library is a great free resource. Instead of buying books, check them out from the library. Many libraries also have DVD and video game rentals which are really reasonably priced or sometimes free. If you are planning a vacation, look at off season destinations. Or better yet, consider a staycation. Explore your local area as if you were a tourist.
Whatever your entertainment needs are, make sure your budget allows for it. If you find that you are going over budget, take a hard look at what you could change.
Clothing and Accessories
Although clothing is a necessity, you don’t have to go over budget to be fashionable. Buy clothing off season to save money. Wait until items are on sale or for when you have a coupon. Shop at second hand stores to save even more. Sometimes you can find designer and brand new items at thrift stores. If you have a lot of nice clothing, clean out your closet and consign items you don’t wear. Use the money you earn from consigning to buy your new outfit.
Another option for clothing is to host a swap. Have friends and family gather all of their in good condition unwanted items. Host a party where you all swap items. This is a great way to score new to you items without spending a dime!
When creating a budget it should be personalized for you and your families needs. While you are planning, make a list of your biggest budget busters. The above budget busters will not apply to all of you. Some of you eat out often while others may be fashionistas. Determine what your weakness is and plan accordingly with your budget.