Sticking to a budget is more than just keeping your spending under control. Yes, that's important, but unexpected financial pitfalls can completely blindside you and wreck your budget too. These fall under three basic categories.
Financial writer Trea Branch rounds up three general pitfalls that can wreck your budget. Here they are, along with a few tips for managing:
- Emergencies: A solid emergency fund should definitely be a part of your budget plan. Car problems happen, as do lay-offs and unexpected doctor's visits and vet bills. Not being prepared for these can easily cause you to wreck your budget, and that can lead to desperate financial moves. Even if you only sock away a few bucks here and there to build an emergency fund, it's important to make this part of your plan.
- Irregular expenses: And then there are all of those irregular expenses you forget about, such as birthdays, holidays and car insurance premiums. These expenses can be pricey, and they can throw your budget for a loop. When drafting your budget, make sure to look beyond your monthly bills and consider all of your quarterly, annual and bi-annual expenses too. Or consider setting up a separate budget just for unexpected expenses that pop up.
- Small purchases that add up: A few bucks here and there might not seem like a lot, but it can add up and put a big dent in your spending plan. This is why it's important to account for every dollar.
We've discussed these pitfalls in one way or another before, but it's useful to know exactly what they are so you can create a solid defence for your budget. Check out Trea's full post at the link below.
Stick to Your Budget by Fighting These 3 Budget-Busters [Trea's Two Cents]