Wednesday, November 17, 2010

5 Big Budget Mistakes to Avoid

Do you know where your money went? If you just got paid but your bank account is empty, maybe it's time to rethink your budgeting skills. Fixing the big budget blunders is not hard to do--you just have to want to do it! Here are five reasons why your budget is broken.

Mistake 1: You don't have a system. Is your filing system a mess of envelopes scattered throughout the house? When your budget is blowing from room to room and you're confusing last year's grocery receipts with this month's food bill, it's time to try a better system.

Mistake 2: You don't honestly track your spending. You spent how much at the mall last week? If you're fudging your numbers before entering them in your budget, it's impossible to make everything balance.

Mistake 3: You don't make it a habit. Old habits are hard to break, right? Well, ditching your budget after a few tries is a surefire way to fail. Building a solid household budget takes practice, and giving up after a week is a common reason for failure.

Mistake 4: You don't have an emergency fund. There are exceptional people out there who never get sick, never lose their jobs, and never need a car repair. Lucky ducks, but I bet you're not one of them. When bad things happen to good people, chances are you'll need money to get through the tough times. And maxing out your credit cards or running up your credit limit can put you in a bad financial situation, leaving your budget broken.

Mistake 5: Your spouse hates budgeting. Do you argue about money with your partner, spouse, or significant other? You're not alone. Fighting about money is a common practice in households across the world, and can lead to bitter breakups that bust the bank.

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