5 Things That Could Break the Bank if You Can’t Stick to a Budget
It’s difficult to stay on budget, and everyone has off months. However, if you consistently spend more than you intend to, or you don’t even have a budget yet, there are some purchases that you absolutely shouldn’t partake in. If you don’t have a budget yet, your first step should be to make one. There are many budget sheets available online, including several from Budget Worksheets. The more detailed your budget, the better chance you have of accurately determining your expenses, and hopefully, sticking to a set amount each month. If you’ve had problems sticking to your budget, try to reevaluate it. If you are just now establishing a budget, or you regularly ignore your budget (or overspend accidentally), here are some purchases you should avoid.
1. A new car
Regardless of whether or not you have enough money in savings to purchase a new car outright, you would be making a big mistake to do so. If you already can’t stay on budget, a new car would be a very dangerous expense to take on. Monthly payments for new cars are usually expensive, and even if you can afford to pay for the car outright (or put a large amount down), if you regularly overspend, you should be using that money elsewhere. If you really need a car, you can consider purchasing a used car. However, even doing that is a bad idea if you regularly don’t pay your bills on time, or you overspend. It doesn’t make sense to take on an additional payment for a few hundred dollars per month, or to take money away from other bills.
2. A new house
Much like purchasing a new car, if you can’t stick to your budget, purchasing a brand new house would probably be a bad idea. Even if the house you like costs less than your rental mortgage, you could place yourself in serious financial risk by taking on a mortgage. Purchasing a home comes with more costs than just the mortgage as well, including the cost of the home inspection, taxes, and various fees, according to U.S. News & World Report.
Once you own the home, you will face home insurance, potentially lawn care or a security system, and home repairs that you wouldn’t need to pay for if you were renting. Sometimes owning a home can be cheaper than renting, but if you are really interested in doing so, you should get your budget in order first, and prove to yourself that you can actually make the payments (and save for repairs and emergencies) before purchasing.
3. A vacation
Ideally, if you want to go on a vacation, you should set aside money each month to save ahead. That will be really difficult if you already can’t stick to a budget, or you don’t have a budget at all. Even though occasionally people can afford to take money from their savings to pay for a vacation, if you are overspending, you should not consider doing that. While a vacation is often a wonderful thing, it is a completely unnecessary expense, and you can’t justify it if you are not in a secure financial spot. Taking a vacation could leave you deeply in debt, or at least, even more behind in bill paying and saving than you already were.
4. Impulse purchases
Almost all of us are guilty of picking up an item by the cash register once in a while, even when we don’t need it. However, impulse shopping can easily derail a budget, and your budget may already be suffering from too much impulse shopping. If you can’t stick to a budget, but you haven’t made any big purchases, your impulse shopping should be one of the first things you evaluate. Even if you regularly just spend a few extra dollars, those dollars can add up. In order to curb your spending, make it a priority to only purchase what you came to a store for, consider using cash so you can’t overspend, and don’t let your emotions lead you to overspend.
5. Extra monthly costs
As hard as it is to believe, you can get by without a super-new cell phone that allows you to do almost anything you could ever imagine. You don’t need to pay for a high-data plan if you don’t want to. You also don’t need to have satellite or cable television, you don’t have to pay someone to clean your house, and you can do your own laundry instead of paying someone to do it. You can also say no to restaurants. There are so many regular charges that can easily ruin a budget, and until you have enough money to afford them, or you become an expert at staying in budget in other ways, you should avoid all the extras that you don’t need.
Staying on budget is hard for most people, but you don’t have to make it harder on yourself by indulging in expensive purchases, taking a vacation, or wasting money on impulse buys or unnecessary monthly charges. Take the time to sit down, evaluate your budget (or make one), figure out why your budget is failing, and fix the problem.