At Rock Bottom T-Shirts we’re always trying to find ways to help you save money. We’ve found that creating a budget is the most effective way to manage and save your money. Unfortunately, many households never experience the benefits of budgeting because they’re unsure about how to start. Others feel that the difference between their income and expenses is so small that they’re discouraged from even trying to put a budget together-before they even start. These are just a few of the mistakes that we, as consumers, commonly make. Follow along as we share remedies to these and other common budgeting mistakes.
Mistake 1 – Not Using a Budget
Even if it seems impractical to use a budget when there’s already so little money, putting the numbers down on paper can work wonders for you. It can reveal money leaks, open possibilities for cutting back, and it can help you to prepare for the unexpected.
Mistake 2 – Focusing Solely on Expenses While Neglecting Income
Another common budgeting mistake that you should avoid is assuming that the only way to fix a budget related problem is to cut your expenses. Of course this is often the easiest way, but you can only cut so much. You should also work on the other side of the equation by looking for additional ways to bring in more income.
You can sell something, get a second job or create a part time business to supplement the income that you already have. While it is not a desirable fix, this is sometimes the only way to get a budget back on track. Also, when you sit down with your accountant to do your taxes, make sure you’re not having too much taken out each week from your paycheck. While it’s always fun to get some money back at tax time, that’s money the government has been earning interest on all year long while it could have been part of your budget , helping you make ends meet or paying off your debts.
Mistake 3 – Not Building Savings into Your Budget
Setting a budget but failing to consistently set aside funds for savings or unknown expenses is another very common budgeting mistake. If the bottom line on your budget is zero, or if your budget looks good but you have very little going towards savings, this is a sign that there’s still room for improvement.
Cut more, make more, or make the difficult choices but a budget must leave room for unexpected expenses and savings. If it does not, in the long run, it will be difficult to improve your finances. Creating a budget can be a very difficult and painful process, but it is vital to your financial health. Once you begin to master this process you can begin to use your surpluses to reduce your debt. Though it may be tough in the beginning, sticking with a budget can help your tremendously in the long term.
Do you have anything about budgeting mistakes that you’d like to add to this discussion? We’d love to hear any thoughts or experiences that you may have on budgeting. And if you enjoyed this post please like it on our Fan Page or Tweet it to your followers.