According to research from Gallup, only 1 in 3 Americans actually prepare a detailed household budget. Meanwhile, only 30 percent of Americans prepare a long-term financial plan outlining their savings and investment goals in detail.
Preparing and planning a budget is the first step toward financial health and stability. But, a budget is only worth its value on paper if you commit to it. Unfortunately, there are plenty of reasons — or excuses — that keeps people from committing to their financial goals. Here are five of the leading budget breakers and how to avoid them.
Spending Money Irrationally
Rethink your spending by committing to actually tracking every penny you spend. Packs of gum, your morning coffee run and grabbing a magazine at the subway station all start to add up. Soon, those unconscious — and unintentional — spends will begin to cut into your carefully crafted budget. Keep tabs on everything you spend with a spreadsheet or app like Evernote to jot down all your purchases. Train yourself to pause and think about if that splurge is really worth it or if it’s an indulgence you can do without.
Forgoing Routine Car Maintenance
Everyone knows an emergency fund is key to maintaining a healthy budget. But ongoing maintenance and repairs are often an afterthought that can break your budget. According to TheBalance.com, 1 percent of the purchase price of your home should be set aside for routine maintenance costs.
But that doesn’t account for car repairs. Auto Traders suggests saving around $500 for a $10,000 car, or $1,500 for a $30,000 car. These costs could come out of your budgeted emergency fund. Remember to always invest in quality car tires with a reputation for long-lasting durability, which will offset the costs of ongoing repairs and replacements.
Overspending on Conveniences
Overspending on food is a common problem for budget watchers. It’s all too easy to zip through the drive-thru or throw random groceries into the cart instead of carefully thinking through the purchase and using coupons. Plan ahead to curb your convenience addiction and cut your food budget. An app like Food on the Table can create meal plans based on your family’s food preferences and then match items that are on sale at your local grocery store.
Choosing Expensive Entertainment
The cost of movie tickets, snacks and evenings out are budget killers. But it doesn’t mean you have to sit around at home and read a book. Get rid of cable and stream movies and shows from a service like Netflix or Amazon Prime. You could also check out your local library’s supply of rentable DVDs and CDs to sponsor your next movie night. And for local events, scour local websites to bookmark free days at the museum, movie nights in the park, or downtown wine tastings and festivals.
Spending Money Recklessly
Believe it or not, people often bust their budget because of emotional spending. A bad day at work, fight with a loved one or productivity slump can result in heading to the mall or favorite online shopping outlet. Stop the cycle by focusing instead on self-care. Take a walk, call a friend or surround yourself with favorite books and movies to better soothe yourself. The sooner you put your wallet aside when you’re next upset ane emotional, the sooner you’ll stay on track and stabilize your budget.