13 June 2016
Hidden Budget Busters

Chances are, you have budget busters. Most households do. Little expenses you may not even notice, like ATM fees, or fast food lunches.

You run into budget busters every day. In the checkout, you’re standing next to the tabloids and candy bars – relatively low-cost items. That’s why stores place these impulse purchases by the checkout. Customers see a favorite candy bar and toss it in the cart – an impulse purchase made without a thought.It adds up so quickly and easily.

Many consumers spend more than the household brings in, but when you identify the little budget busters that add up, you can more easily stretch that budget and even start an emergency fund for the family. Cutting budget busters just makes good money-management sense.

Finding hidden budget busters starts with an accurate analysis of where your money goes each month. Use the monthly statement for your checking account to collect hard numbers on household spending habits. How much do you charge on your debit card for that daily coffee? For gas? For fast food? Total it up for the month and you may get shocked enough to start taking steps to reduce your spending.

Here are some of the most common budget busters:

That coffee shop on the way to the office. You love the coffee and you need to jump start the day. Buy it on the road and it may cost you $4.50. Shave that number down to nearly $0 by making coffee at home.

The night out. A fancy night out is going to cost a lot. Look for low- or no-cost alternatives, like a picnic at the park, or a pizza-and-movie night at home.

The breakroom vending machines. They’re like vacuum cleaners gobbling up loose change. We know breakroom food is often loaded with empty calories that add weight around the middle while shrinking the size of your wallet. It’s easier and smarter to bring your own snacks to avoid empty calories and another hidden budget buster.

Ignoring warning signs. The “GET SERVICE NOW!” light has been lit on the dashboard for six months. A small roof leak can be ignored because it’s only a problem when it rains. If you see a problem, fix it to avoid making a bad problem a really bad problem that costs a whole lot more to fix.

Wasting gas. When gas is expensive, a fill-up can cost a lot. Don’t waste money on unnecessary trips. Figure the most expeditious route to get errands done. When you do the week’s shopping, go with a list so you don’t miss anything that requires a return trip. Carpool to work or take public transportation. Cut down on trips and watch your checking account balance start to grow.

Credit card spending. You need a credit card for emergencies, and it’s often necessary for online purchases or car rentals. If you blow a tire, you may need your credit card to get home. However, if you use credit cards to buy items you can’t afford, you’re not only busting your budget, but you’re also paying more for the item because you pay interest if you can’t pay the credit card bill in full.

If your monthly credit card statements are always unpleasant surprises, take control, and take the scissors to some of those credit cards. Keep one for emergencies. Shop around for low interest rates, and incentives like rewards points or cash back.

Start the process today. Go through your expenses to discover where you can save without it hurting too much. Think carefully before spending, identify the drains on household income, and pay down credit card debt.

Then, put the money you’re saving into a contingency fund for emergencies and enjoy greater peace of mind.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.

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