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Budgeting Basics: Budgeting Mistakes to Avoid
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Common budgeting mistakes
- Not Tracking Expenses: it's impossible to stick to your budget if you don't know where your money is going.
- Buying on Impulse: Impulse buying is expensive.
- Becoming the Victim of Budget Busters.
- Being So Frugal It Makes You Miserable: you’ll binge later and throw all your hard work out the window.
- Trying to Do Everything as Inexpensively as Possible.
- Not Asking for Help.
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Tracking expenses
Write it down when you’ve gone over your budget. The negativity you feel will help prevent you from overspending more or doing it again. Just think of this step as damage control.
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Being frugal and miserable
If you try to deprive yourself too much, you’ll binge later and throw all your hard work out the window.
A spending binge can set you back far more than treating yourself occasionally, so go for the occasional minor splurge. Just keep your treats within your spending limits and you’ll be fine.
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SIMILAR ARTICLES & IDEAS:
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Budgeting = creating a plan to spend your money
Budgeting is simply balancing your expenses with your income.
It's a plan for the coordination of resources and expenditures. When you budget your money, there’s a desir...
How to create a budget
- Gather Some Financial Information: gather a detailed list of your income and expenses.
- Select a Budgeting Method: figure out how you’ll budget your money to meet your most pressing financial goals.
- Create Your Budget: tally up all your expenses and income to see where you stand and allocate expenses.
- Execute Your Plan: you can use a notebook, pen and paper, a spreadsheet or an online software.
- Reward Yourself: you can work a small percentage into your budget to treat yourself each month.
The 70:20:10 budgeting method
This method suggests that you allocate 70 percent of your income to expenses, 20 percent to savings, and the remaining 10 percent to debt.
70:20:10 may work for someone with a healthy emergency fund and minimal debt.
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Myth: Shop Early for the Best Deals
While early holiday shopping can snag you discounts and the best selection, you are most likely to get the best deal just before holiday shopping.
Retailers need to move h...
Myth: Buy Coupons for Huge Discounts
Coupons are sold in lots to allow couponers to stock up on the best deals.
While coupons are great to save money, it does not make sense to spend on coupons in order to save. Coupons vary greatly by geographic location and store, and may not apply to your geographic area. Instead of buying coupons, get the Sunday paper for better ads, download an app or keep a coupon binder to stash extras.
Myth: Always Buy in Bulk
It makes sense to stock up on non-perishable items such as soap and canned goods.
However, buying wholesale perishable items like fruit and milk might mean it goes to waste if you can't consume it before the expiration date.
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When budgeting comes in handy
- You have no idea where your money is going.
- You’re chronically overspending.
- You’re not saving any money.
- You struggle to afford the things you really want.
- You...