Avoid the top 10 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. However, too many people have a second income so they can overextend themselves on credit, particularly when it comes to buying more home than they need. What happens if one income dries up? Live within the means of a single income and you’ll be safer and more economical.
Not putting money away
Savings accounts, college funds or even rainy day funds. Whatever you choose to use it for, you need to set small portion of each paycheck aside. It pays to be prepared!
Will that hole in your soul really be filled with a new television? If your old one works just fine, seriously consider whether you need a replacement. Impulse purchases can be deadly, so make sure your budget focuses on what you really need each month. Sure, there should be some money earmarked for entertainment, but you must be disciplined enough to stay within the boundaries. When you do shop, try to look for sales and special deals.
Not recording expenses
When your budget is young, this is essential. Record purchases in your check register, Smartphone or in a notebook so that you have visual proof that you’re following your budget. Eventually you will get the hang of it and won’t need to record things right away, but if you start to notice trouble, don’t be afraid to go back to recording it all.
Going credit crazy
This is very symptomatic of overspending. If you don’t have the money for something, don’t buy it. Using credit makes it too easy to overspend, and long-term revolving interest is very expensive. If you must use credit, try to pay it off right away as opposed to carrying over a balance.
Being too charitable
This one might sound odd, but it’s obvious, isn’t it? There’s nothing wrong with being generous, but you still have to look after your own bottom line.
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 common practice for kids, but is it really 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 feel your pay level is consistent with others in your field, talk to your boss about it. If you are indeed valuable, a reasonable employer will at least 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 can help, but budgeting is the best way to handle your finances over time.