Avoid Spending Pitfalls!

With all the advantages that are evident from personal budgeting, it is no wonder that more and more people are relying on them to reduce debts and increase their savings. However, all ‘budgeters’ need to be careful to avoid some common pitfalls that appear often.

Credit cards may seem like small pieces of plastic, however they can cause a great deal of trouble for the owners. It is common for people to make unwise purchases, which they would have avoided otherwise, because they had the credit card in their wallet. The best solution for many people is simply to get rid of credit cards and begin paying only by cash, check, or debit cards. You may want to keep one card handy for emergencies, but it is probably best to keep it out of reach, and far away from your wallet.

Another problem with budgeting is impatience. There are financial goals set, but people do not have the patience to complete a savings program. For instance, an individual begins setting aside money for a new car; however, after a few months they discover the car of their dreams. Rather than waiting, they make the purchase. This could pose some serious financial strains. Discipline is a must to prevent impatience from breaking your budget.

Once a person makes a budget, they often fail to adjust it when necessary. A budget is created using a set of expenses and income figures that are liable to change. As these figures do change, it is important that the budget changes to reflect the adjustments. There could be some major deficits if this is not done appropriately and promptly.

Of course nobody forgets about Christmas or Hanukkah, however many people do not consider budgeting for holidays when creating a budget. Therefore, adequate funds have not been set aside for presents, food, parties, etc. These items should be factored in and saved for throughout the year.

Finally, many people factor in transportation and accommodations for vacations in their budget, however they underestimate money needed for food, entertainment, and spending money. Keep in mind that all the resorts and tourists areas are double or triple what you would normally pay.

With a little planning, you’ll be on your way to saving more money than you ever thought possible!

Start Saving!

So you are loaded down with bills to pay each month and are wondering how you can begin a savings account for emergencies and other high-expense endeavors. In other words, where can you find that extra cash to put away for later?

Firstly, when configuring your budge, plan for your savings first. You will grow richer each month if you begin to pay yourself first. Before paying any bills, decide on a set amount that you will pay yourself first—maybe five or ten percent—or whatever you decide—of your paycheck. Then, deposit the amount into a savings account before paying any bills.

When you do this at the beginning of the month, your entire paycheck will not suddenly slip through your fingers. If you wait until the end of the month, there may be nothing left to save. Paying yourself first will give you a systematic way to make your money grow. Regardless of your profession or your income, this system will work if you stick to it.

Another technique you may try for saving money is to empty your extra change into a coffee can or a jar each day. At the end of the month, roll the coins and put them into your savings account. You may be able to save 30 or 40 dollars each month just with your spare change.

Remember that good money management is more than just a mathematical formula. It’s too closely tied with the ups and downs of living to be just that. Your money management plan is always subject to change if your life situation changes. The object of a good budget is to make your money go the farthest in helping you reach your goals, it is not there to force to you to abide by rules.

Don’t get discouraged if the budget plan doesn’t work perfectly right away. It may involve some revising and editing until it fits your needs. Then, make sure to review it often, and be sure it is making the best use of every penny! Because we know how helpful those spare pennies can be!