Avoid these 5 mistakes when planning your budget
Budget planning and saving your hard earned money for emergency purpose should be your first priority. You must plan your budget according to your income and must have a budget made for every month as well as every week. Take help of personal budget software so that you get to know how to go about the process. Just remember to follow the rules well so that you don’t end up committing mistakes that’ll put you in any false situation.
Which 5 mistakes should you avoid?
Money management is the most important part of your saving process. Not having any management skill can leave you high and dry and you may also accumulate debts. Take a look at the mistakes you must avoid when planning your budget:
1. Short-term money management
First of all when you create a budget spreadsheet for your family expenses, do it for the month. Since you need to also save for the holidays and other such emergencies, you must also think ahead of time and not limit your thinking only to a monthly budget planning. Just keep changing your budget planning every month so that you can spare some amount on your emergencies and also when you’re short of money. Think of long-term money management instead of short-term ones as it’ll help you in the future.
2. Not having a budget planner
You don’t have to be a computer savvy to keep track of your savings and expenditure. You can create a spreadsheet in your computer or maintain an excel sheet for that purpose. You just need to keep updating the figures in the savings and how much you spend every time. Maintain the figures and try to improve the savings figure the next month. If you don’t have a budget planner at all, you may fall into debts and also you won’t be able to know when and where your monthly savings are vanishing.
3. Excess use of credit cards
When you’re planning a budget every month, you must not use your credit cards a lot. This will eat up your savings and you’ll have to keep paying your interests on your cards. But if you pay by cash, you’ll know where you’ve last spent your money and you’ll be saving on interest payment too. Except for 1 or 2 cards for emergency cases, stash away the rest of your and try to pay them all in full to keep your credit history clean.
4. Shopping spree
Yes, that’s right. It happens that when you’re planning your budget, you must make it a point to work accordingly. It’s quite easy to plan out a budget but working accordingly is what’s challenging. You may think that since you’re planning out a budget, you can go on a shopping spree and get everything you want and wish for. This gets you addicted and before you know you’re in debt. Keep your shopping limited to useful things and those items that you think are useful in your life.
5. Copying others
You may have close friends with whom you share a lot of things but keep your budget to yourself and never create the same budget planner as your friends’. Your salary is way different from others and you must plan your budget according to your money and capability. If you try to take others help in it, it’s fine but completely copying others’ style is out of question.
When you start making your budget and walk in it’s footsteps, you’ll see that you can easily invest in things you want. Before you have a good amount of saved money, never indulge in costly habits and try to create a budget which you can follow.