Top Ten Budget Busters|
By Michelle Jones
Many people make sincere attempts to set up a household budget
and get themselves together financially, but too often these attempts fail.
And for those with the most difficult financial circumstances, it may take
several attempts to finally create a plan that works.
We've talked a lot about how to get started with budgeting (and
back on track), but let's look at some of the budget busters that may be
throwing us off track in the first place.
1. Living on Two Incomes
When a couple first starts out, they often have two incomes and
will set up their household budget based on that combined total. But as soon as
the first financial crisis hits and one of those incomes is reduced or even
wiped out, everything can fall apart. The solution; couples should make every
effort to live on one income. Use the second income for savings and extras, many
of which will be needed due to the additional job.
2. Not Enough Money in Savings - for Emergencies
This should be obvious to everyone, and recent financial reports
reveal that we're finally starting to set more and more money aside in savings
accounts. congratulations! However, there are still many of you out there who
haven't even opened an account yet. So, when your next paycheck arrives, just DO
3. Spending More Money than You Really Need To
Ouch. I know that one hurts. The fact is, many of us are still
spending too much money, even though we know better! There are lots of things
you can do to control spending, if it's a constant problem for you then make
yourself some rules and stick to them. Some of your rules might include: "I
won't buy anything that isn't on sale - at least 40% off" or, "I won't buy
anything the first time I see it, instead I'll wait for at least 48 hours - or a
week - to see if the 'need' passes," or even better, "I won't buy anything that
isn't on my 'need' list!"
And families can keep each other on track - "I won't buy
anything that (name of family member) doesn't agree we should buy." That one
will cut out a lot of extra spending, and remember, it goes both ways!
4. Not Keeping Track of the Extra Money You Do Spend
If you haven't tried this yet it may be the biggest step you
will take in keeping your finances under control. For 30 days, write down
everything you spend money on, and keep doing it as often as needed; every
month, once a quarter, and then down to once a year if you're staying within
If you get off track, start recording your expenses every month
again. Keep a small notebook in your purse or car, and log every purchase, every
day. It may seem trivial, but it works.
5. Putting Too Many Purchases on Credit
Boy is this easy to do if you're not paying your bill in full
each month. A few purchases can easily add up to hundreds - or thousands - of
dollars. Keep track of your purchases when using credit, just as you would when
using your checking account or cash.
6. Giving Money Away When You Can't Afford It
This subject is difficult to discuss because the final decision
must be left up to the individual - each person ultimately must do what he/she
feels is the right thing to do, at any given time. Generosity is certainly a
worthy trait, and one we should all continue to improve. However, if you
continue to give money away that you can't really afford, as Dr. Phil McGraw
would say, "How's that working for you?"
If it's working, great! If it's not, consider adjusting your
giving, or increasing your income so you can continue to be so generous. You can
also give your time and the material items you no longer need to those who do.
That can be just as valuable as money, if not more.
7. Buying People Gifts When You Can't Afford It
This area of spending is similar to #6 above, but goes a little
deeper than just being generous. I'm referring mainly to the annual birthday and
Christmas presents we purchase for our friends and family. If it's stretching
your budget or keeping you in debt, make an effort to scale back this year, and
And this includes the lavish birthday parties some parents feel
they must put on for their children, even giving away 'goodie bags' that value
$10, $20 or even more. When I was a kid birthday cake and ice cream was
wonderful enough. It's possible, by handing out 'goodie bags' to all the party
attendees, we - as a society - are teaching the children to expect something in
return whenever they give a gift. Who started this madness?
8. Accumulating Too Many Monthly Bills
It may not seem like much, but $20 here, $15 there, and another
handful of monthly expenses everywhere can add up to one big mess. Just as
keeping track of your monthly spending will benefit your budget, keeping your
monthly bills in line will help tremendously. That's what creating a budget
does, your monthly income must cover the outgo, and if it doesn't, you cut back.
9. Not Earning Enough Money
If you feel you're not earning enough money for the work you do,
you might consider asking for a raise or promotion, or, looking for a better
job. If these options are not available to you at this time, work on improving
your skills and value to your employer so they will be soon. Taking on a
temporary second job might help as well, just don't create a schedule that you
10. And Maybe Our Worst Budget Buster of All. Not Creating a
Budget in the First Place
"Never put off till tomorrow what you can do today." - proverb
Don't let another day go by without gaining control of your
finances... it's just money, you CAN handle it.
Jones , Founder and Editor of