Budget busters can wreak havoc on all your best-laid plans.
They are potential problem areas in your budget that must be
kept under control in order to avoid disaster.
Here are some examples:
Housing – Paying rent or mortgage payments you cannot afford.
In today’s society, this is a big one. Walk away from the pressure you may be getting from others. Purchase a home only if the mortgage, taxes, insurance and utilities combined do not exceed 38% of your total budget. Do not take out a second mortgage for the down payment.
Food – Spending more than you would if you had a good plan.
Many trips to the store, paying full price for items that are frequently on sale, impulse buying and desperation dinners are a result of having no plan in place to keep the food bill under control. This is a waste of time and money. Plan your menus ahead of time and stick to your grocery list. Buy sale items IF it’s something you use on a regular basis anyway; stick with generic brands, and try to avoid pre-packaged processed meals. Buy from convenience stores only in an emergency. Paying attention to these little details can drastically reduce this budget buster.
Automobiles – Succumbing to the desire for a shiny new car every couple of years.
This is an area where many of us get off on the wrong track. Break the cycle! Purchase a car only if you can afford it, and keep it until it’s no longer useful. Take good care of it. Pay cash if possible (this is the goal in budgeting for this item). Look for bargains. Used cars cost less to insure, and this is important too!
Insurance – Depending on an insurance agent to determine your actual insurance needs.
Here’s a budget buster that’s all-too common, and most people don’t even realize it! Insurance should be an additional provision for your family that changes as your family grows and your situation alters. It’s worth the effort to dig deeper, understand better, and make the right decisions based on your life needs. A little education will truly go a long way.
Entertainment & Recreation – Believing that having fun and relaxing has a big price tag.
This is a biggie! Oh, how easy it is to feel we deserve to have that vacation or go see that movie! Yeah, you work hard, put up with frustrating people, deal with the stress – some relaxation is good for you! But does it need to cost so much? No! If you’re still in debt, find the stress-releasers that are free. Dust off those old board games or jigsaw puzzles. Invite some friends over for popcorn and ghost stories. Use your imagination! Saving in this category can quickly facilitate paying down your debt and getting on the right track! Your time will come. Have patience.
Clothing – Thinking you have to spend a lot of money to look good.
The truth is, your family can be nicely clothed without great expense! It just requires some effort in saving enough to avoid using credit, taking proper care of your clothing, and mending your own clothes to lengthen their usefulness. You might be surprised at the treasures you can find in thrift stores! Purchase pieces that mix and match, and are versatile, appropriate for a variety of occasions. Most of all, pay attention to laundering instructions and care. This will help you get the most out of what you have while you set aside money for the occasion to purchase something new you might need. And even if you do have surplus income, having all the latest styles is unnecessary--even wasteful. Put that surplus to better use.
Savings – Depending on "someday" to start a savings plan.
Having savings is not a budget buster: not making sure you save every month is! Even the best savers and planners have a hard time not using up their savings allotment on something else if it’s right there for the taking. Set up automatic deductions or transfers to move it to a safe place and ensure you don’t use it for something else. It’s easy to set up. Do it!
Miscellaneous – Forgetting how much of your money goes to fixing or replacing things.
A big part of miscellaneous expenditures include repair costs of appliances and household maintenance. This is an area that you can keep down if you do them yourself. There are many resources to help you learn, and is a wonderful training ground for your children. Other helpful hints to avoid these budget busters is simply shopping for bargains, lowering your bills by cutting out unnecessary options and programs, etc. Never underestimate the savings power of simply taking good care of everything you own. Don’t let gardening tools rust outside, or run a machine into the ground because you didn’t follow the instructions or maintain it properly. All these add up!
The biggest budget buster: DEBT! – This is the monster that must be destroyed. When this area is out of control, the rest of your budget will not work effectively. Tackle it with every ounce of effort you can muster. Once it’s gone, you’ll be able to breathe once more, and whatever you do, don’t go there again! Destroy all your credit cards, buy with cash, take on a second job for a while, and sacrifice all your wants and desires until your debt is beaten into submission. This is of primary importance in attaining financial freedom.
For more on demolishing debt, see page on Debt Elimination.