Common Budgetary Mistakes

There’s no one right way to do a household budget. It doesn’t really matter how you do it, just as long as it gets done. However, be careful you don’t fall into some of these common traps.

• Not planning for yearly expenses. When you make your budget, you put in your monthly expenses—groceries, electric bill, cable, gas, etc. But you might forget about those bills that only come once a year, like car insurance or property taxes. To add them to your budget, just divide the total by 12 and add that amount to your budget each month.
• Not putting money aside for emergencies. You’ll blow your entire budget if an emergency comes up, like if you need new tires or emergency dental work. Keep a small cushion of savings for these unexpected times in life.
• Spending money as soon as you get it. When you get a windfall, like a tax windfall or inheritance, instead of running out and buying that big TV you’ve had your eye on, put the majority of the money into your savings or emergency fund.
• Being inflexible. Just because you’re on a budget doesn’t mean you can’t enjoy life. Take some from Column A and put it into Column B if you need to. Skip going out to dinner one month and treat yourself to a new outfit instead.
• Impulse buying. Nothing blows up a budget faster than impulse buying. It could be anything from a new pair of expensive shoes to a “treating” yourself to a coffee every morning. Everything adds up. If you haven’t set the money aside, don’t spend it.
• Not tracking past expenses. The best way to keep your budget on the straight and narrow is to use your spending history as a guide. This is especially true when budgeting things like utilities, which usually vary from season to season.
• Not looking out for No. 1.  You work hard to pay other people, why are you not paying yourself?  Many people forget to pay themselves a portion of what they make.  If you stretch you budget each month and you are not included then what is the point.  Some restructuring might be in order.

If you are like many people, living pay check to pay check and still do not have enough you might need further assistance.  A full service debt relief law firm such as Harold Shepley & Associates can provide you with all the information you need to either make changes for success or provided options for significant relief from debt. Contact us today by phone 1-866-284-7062 for a free consultation or find out more at www.shepleylaw.com 

By Harold Shepley | Published February 21, 2012 | Posted in Bankruptcy | Tagged bankruptcy, budgetary mistakes, Pennsylvania | Leave a comment