Have you decided not to create a monthly budget because every time you create one you always bust it. Why waste my time when I know I will bust it before the end of the month. Creating a personal budget is important to your personal financial health. Sticking to your personal budget can be challenging but it is key to living a simple financial lifestyle. You are probably asking what do I need to do to stick to my budget.
One key to sticking to your budget is to make sure it fits right. Maybe your budget is too tight or too loose. Make sure you design it just right for you. Once you have had an opportunity to review your budget to make sure it fits.
Here are a few common budget buster you should be aware of to prevent yourself from busting your budgeting:
Splurging or unplanned purchases
We all do it but we must limit it or at least budget for it. If you know you have a tendency to buy things at the spur of the moment instead of planning just put it in your budget. Hopefully you are not buying high ticket items every month. If you are you may need to look at your spending habits. If this is a issue you want to make sure you are budgeting your monthly savings. Your monthly saving should be automatically transferred to another account before you go on your shopping spree.
Unplanned medical expenses are usually something you cannot predict. But you know they will occur each year. Having adequate medical insurance in place and a reasonable deductible or co-payment will lessen the impact of those unplanned medical expenses. Also establishing a HSA will help with these expenses.
Unplanned repair bills
Similar to having medical expenses you cannot always predict when they will occur. To lessen the impact on you budget have preventive maintenance performed on your car, appliances and home as recommended. You can schedule these out as well as prepare for them in your budget. Many times even if you do preventive maintenance things will still need repairing. This is why you should have an emergency fund in place so your monthly budget is not impacted.
This is a big where I could use some work. It’s so easy to just go out to eat instead of planning ahead and have dinner at home or even bringing your lunch to work. Try limiting the times you go to dinner each week. I know what we may spend on a dinner for four we could easily prepare several meals at home.
Increase insurance expenses
We cannot control how much our insurance premiums will increase each year. But what you can do so your premium does not bust your budget is to review your insurance policies each year to make sure your coverage is appropriate. You may want to even shop for another insurance providers if the increase is significant.
Anticipating these potential budget busters will help you stick to your budget as well as put things in place to help lessen the impact on your budget when they do occur.
What are your budget busters and how do you avoid them?
Take action by reviewing your spending and think about what is causing you not to stick to your monthly budget.
Til next time take one step at a time to simplify your finances.