5 Ways You kill Your Budget Every Month

For the last two years, I’ve seriously bucked down on budgeting, because of this I’ve learned to identify 5 areas that kill my budget every month.

5 Budget Killers

1. Not Budgeting In Every Expense

In my earlier budgets, I would not account for every expense.  I would draft the budget and leave out little things like gas, groceries purchases, sports fees, and medical copayments.  Sure, adding them to the list later may seem simple.  However if by any chance the money was spent this method would only lead to overspending and frustration.

Lesson Learned

As accurately as possible write down every expense, even those little expenses should be included in the budget.

2. Rushing To Pay Off Debt 

Once monthly I write out the amount I planned to pay on each bill.  When it came down to my credit card balances I would plan to pay hundreds towards the balance monthly.  I figured the more I paid the faster the balance would disappear.

This was true for the most part, but with my monthly paycheck having to stretch for 4 weeks it was vital to accurately budget and not pay more than I could afford.  Yet, this was often not the case, I would pay too much money on my credit cards.  Later I would run out of cash and depend on those cards again for food or gas.

Lesson Learned

Stay focused and on task, don’t rush and overpay on a bill if it will lead to creating more debt later.

3. Overpaying For Services

During this day and time we all pay to utilize some type of service in most instances, it’s simply unavoidable.  However in the past what I failed to do was shop around for these services or to simply ask for a discount from my current service provider.

I’m sort of creature of habit so when things work I tend to leave them alone. Yet, by doing so it has cost me hundreds of dollar in overpaid services monthly. A few of the most popular services which I’ve overpaid for monthly are cell phone service, car insurance, and cable TV.

Lesson Learned

Call often to ask your current service provider for a discount or a new less expensive plan.  If that doesn’t work consider switching to a different service provider.  This strategy could save you hundreds monthly.

4. Not Clearly Communicating Goals with Family

My kids are at that age where they are heavily into sports, and they feel as if they need or want every item they see or hear about.  As a parent, on many occasions, these requests were fulfilled within reason of course.  Some even at the expense of my balanced budget.

I’ve found that communicating my financial goals with the kids allows them to understand why the answer may be “no” to their next request. I’ve also considered giving allowances, for chores of course.  With some direction, I believe they can learn early on, how to manage a budget, save, and obtain small financial goals.

Lesson Learned

Involve and communicate debt free goals to kids.  Instead of telling them, show them how to manage their money.  Hopefully, this leads them to a better understanding of budgets, saving, and goal making.

5. Refusing To Save An Emergency Fund

Many successful financial experts recommend that you build an emergency fund as your first step to successfully paying down debt.  Initially, I struggled with this concept because I felt that if I have $1000 dollars that should be applied to the debt.

So starting out I ignored the emergency fund suggestion and simply applied my money towards those credit cards.  For a while, this plan worked until it simply didn’t, and I ran short on cash which resulted in using those credit cards which I just paid down.

Lesson Learned

If an emergency fund was available it would have provided a cash-based safety net and reusing the credit cards wouldn’t need to be an option.

At the end of the day creating a budget is just the first step in financial freedom.  The next step is to activity analyze that budget for any areas of financial improvement.

Have you created your debt free budget?  If so what areas of improvement have you found by doing so?

Please Share!

-Monique