Most of the people think that they are good at managing their own budget. As per the data published by National Foundation for Credit Counselling, almost 60% among the people rated them as grade A or B, as far as their knowledge about personal finance is concerned.
You must be pretty aware of your financial situation, but still mistakes can happen from time to time. After all we are humans and nobody is perfect.
Now, instead of worrying about the budgeting mishaps, it is better to learn from it. Following are the 7 mistakes or common slipups that many of us have made, and how you can avoid them.
Common mistakes while budgeting personal finance and how you can avoid them
- Not creating any budget before the month begins
If you are not ready with your plan in the beginning of month then suddenly you may get a surprise by each month’s certain special expenses e.g. anniversary gifts or any party expense, unless you plan about it in advance.
Therefore, you must make your budget just few days before starting of each month so that you are ready as soon as the new month begins in your calendar.
- Forgetting to track all spending
It may be little painful to record every single purchase after long day working and may not sound very exciting however it is very important. This will help you to take proper control of all your spending.
You can visit bingoloans.co.uk so that you can get proper advice on how to track all your expenses.
- Not price shopping
As per the survey conducted by a NerdWallet, people usually end up overpaying for insurance for their car by $368 per year because they do not shop around enough for best price.
Look for the competition and try to get good deals for everything right from household item to insurance and any other item.
- Skipping the fun
You must allocate some money for a movie, a massage or dinner with your family or friends. With proper budgeting you may take control of all your money and also have fun.
- Not saving for any big expenses
Having a savings fund can help you to focus on stockpiling your money for new car or a beach trip that you have been thinking. Your big purchase will be more enjoyable if you do not have to pay any extra amount for interest payment.
- Forgetting about annual expenses
Often you may easily forget about your HOA dues or annual dental visits till you get reminder for payment. You must prepare list of all annual expenses to be done for each month.
- Carrying debt
About 34% of U.S. households live with their credit card debt every month. Try to make a plan of paying off all your debt and make sure that your student loans or car payments disappear.
If you are debt-free, then use that money for anything that you want, like planning to invest in retirement plan and also enjoying a vacation.