The 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 it!
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
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 your budget.
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
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 every year.
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 can't
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.
Michelle Jones , Founder and Editor of