There are many problems that can occur when trying to save money. One of the biggest problems that people run into is problems with making and sticking to a budget. I know that I can personally attest to that. However, I have picked up some helpful tips on this very subject. I’m learned these tips from my parents, from my friends, and simply from useful internet sites. For this reason, I am going to be writing about some of the pitfalls of budgeting and how to overcome them.
The first problem that people have with budgeting that I would like to help you solve is having unrealistic expectations. This is probably the most common mistake when trying to make a budget. Basically what happens is that most people get these ideas in their heads that they’re going to save a big amount of money per week/month/year etc. While it’s a great notion to want to save a big amount of money, most people have a hard time actually sticking to it. A good of example of this actually comes from my personal life. I have a friend who’s a little older than me, and she went to Bradley University in Peoria, Illinois. Additional she chose to live in the dorms and not commute. When she graduated a couple years back, she realized that she needed to make a budget so she could put aside money to pay off her student loans. Because she wanted to pay off her loans quickly, she decided to save a fairly good amount of money in comparison to her income. Due to this, she had a hard time sticking to her budget and would often times break it. Naturally, she had to reevaluate her budget and since then has made one that she can stick to. Some ways to make a realistic budget includes calculating your expenses, determining your income, setting savings and debt payoff goals, and recording spending and tracking progress.
Another pitfall of budgeting is buying on impulse. I am for sure a victim of impulse buying, especially when I’m shopping for food. Some impulse buying may seem harmless. For example, one study shows that buying a pack of gum when you go to the grocery store twice a week will lead to an expense of about $100/year. While buying a pack of gum seems harmless, it definitely adds up. One way to avoid this is by writing down your purchases. By physically being able to look at your purchases, one can decide what they can and cannot afford. Another way to avoid impulse buying is buying in bulk. An advantage of buying in bulk is that most of the time, it’s on sale for almost a third of the original price. Buying in bulk also helps in making fewer trips to the store so there will be less temptation to impulse buy. Other ways of avoiding impulse buying include paying with cash, following a mandatory waiting period, and making a list of things you really want or need.