What’s Killing Your Budget?
You make the money, but where does it all go? You set a budget, but it seems there's never enough to go around. Here are a few ways you may be killing your household budget.
If you have a budget, but you have no goal, it's going to be hard to stick to it, so set your focus on something. Whether it's saving money for the kids to go to college, or for a family vacation, or just a rainy day fund, have an objective in mind when you do your budget. It's just like losing weight. It's easy to get started, but it's difficult to keep going. It's going to get easier when you see that money starting to pile up. Pin up a picture of a tropical destination, or a brochure of Disneyland, or a photo of a young man in a cap and gown. Make sure you can see it and keep that end goal in your mind.
This happens when you scale back too much and deprive yourself short term to get to your long term goal a little quicker. You're going to burn out and then the budget goes right out the window. Just like a weight loss program, the short term has to be attainable so you can stick with it for the long term. It's fine to scale back a little bit, but not so much so that you're skimping on every day things.
It happens. For some, it happens all the time. It's happened to me and Glen more times that I can count. Of course, there's no way to see it coming, but what you can do so you don't go broke is to prepare yourself, so it's going to literally pay to have some cash set aside for when it does happen, but you shouldn't have to dig into your vacation fund or the college account in order to take care of it.
There are temptations all over the place. Ignore them. I haven't bought shoes aside from $2 flip flops in a LONG time. If you're feeling the intense need to shop or spend impulsively, play the Need/Want Game. It's fun. When you see something, ask yourself, "Do I need it or just want it?" If you can't decide or you hate that game, do what I do. Walk away. If it's still on your mind in two days and you feel like you can't live without it, then go and buy it.
It's super important to keep and eye on your day to day spending. Take a look at your bank statement and add up where you spend money. Is it gas? Restaurants? Coffee? Clothing? Entertainment? Groceries and sundries? Take a look at where all of your money is going. If it's gas, try and take the bus or ask if you can work from home a couple of days per week. If it's restaurants, bring your lunch four days per week and just go out with the gang from work on Fridays instead of every day. If it's coffee, you can buy coffee shop coffee at the store and brew it at home for pennies per cup instead of four dollars per cup. If it's clothing and entertainment, cut back. We have about five percent of the household budget set aside for fun stuff like movies and goofing off. If it's groceries, well, you have to eat and shower, so clip coupons or buy things on sale. Take the money you save and put it toward your savings goal. We also have two great ways for you to save money right here locally! Try Seize the Deal. It's a group buying website that offers one incredible deal every day and you can save 50 to 90 percent off retail. We also have the brand new Value Connection website.
Outgrowing The Budget
You met the goal set, and have taken the vacation or sent the oldest off to college and that's an awesome feeling, so keep going. Start over. Take another good look at your finances and redo the budget. Set another goal. Is there another child in the house that you'd like to start saving for? Is there another destination you'd like to visit?