According to a report on the American Economic Well-Being of U.S Households about 46% of Americans say that they can’t come up with 400$ in an emergency. One of the main reasons for this occurrence stems from poor financial habits such as not budgeting and over spending. Budgeting habits take time to build, but there are pitfalls that make it difficult to commit to. Here are 4 things to avoid while budgeting your money.
1. Don’t make it too strict.
Expenses vary each month due to some unforeseen circumstances such as a laptop break, traffic violation ticket or a sick pet. Hence there needs to be room for flexibility to account for these fluctuations. To compensate for these possible events, try setting 5-10 dollars aside a week as a fund for these random occurrences.
2. Don’t buy on an impulse.
Impulsive buying is difficult to curb since the only thing holding you back is your will power. Take small steps first like buying 1 less item a day or use a shopping list when you go out to the supermarket.
3. Don’t use credit cards.
The perfect way to budget your money is to use cash. Challenge yourself by not purchasing on credit for a month. Using cash instead of credit helps you physically track where the money is going and reduces the chances of you buying random things. It also feels pretty good to see a 0 on the outstanding balance of the bill.
4. Don’t give up too early.
It takes practice to become good at something. People usually give up on budgeting early. Failure does not mean the end of something, it means that you. After several trial and errors, you will come up with a plan that works best for you.
Financial situations are different for everyone, which consequently means that one trick might not work as well for another person. But there are some standard rules that anyone can follow. Budgeting shouldn’t be a stressful, you should have fun challenging yourself. Good luck.
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