Spending Beyond Your Means
This can happen when people have a hard time delaying self-gratification or feel the need to portray an image that they can not afford. This dangerous habit can not only sink a budget fast, but it can also lead to the accumulation of a significant amount of debt.
When you want something, it is best to set it as a goal and try to save money to achieve it. For those who spend money to promote an image, it is time to reconcile their lifestyle to fit one they can afford to maintain.
Impulse Shopping
Impulse shopping is one of the most common habits that can blow a budget. Whether it is the sudden urge to grab something that catches your eye, or the need to buy everything that is on sale or seems like a good deal, shopping off list or budget can cause you to end up with a lot of items you don't need nor can afford.
To avoid this, it is best to create a list when shopping and always stick to it. For those times you find a sudden urge to purchase ask yourself, "do I need it?", "will I use it?", "can I afford it?" Most of the times the answer to one of these questions will be no when choosing an impulse item.
Using Credit for Small Purchases
In today's plastic world, many consumers tend to disassociate with money by using credit cards to make purchases. Swiping a credit card often does not evoke the same feeling as handing over cash, and most consumers don't think about the interest when making a purchase.
Unless you pay your credit card off at each statement, avoid making small purchases on your cards, such as for vending items and coffee. These can add up, and you can end up paying multiple months of interest on a soda. Instead, make an amount in your budget for these types of items and keep enough cash to cover it.
Routine Off Budget Habits
It is easy to get into habits that go off budget, and while splurging once in awhile is OK and will probably help keep you focused, going off budget habitually can throw your budget right out the door.
Some common habits and routines that can add up to a lot of additional expense each month are things such as going out to lunch every day or purchasing specialty coffee every morning. Unfortunately, activities like this can become routine, and you may find yourself doing them without even thinking about the cost.
Keep your finances on the track for the future, by avoiding these common bad habits that can quickly destroy a budget. If you would like to learn more about how a budget can help you save for retirement or major future purchases, contact the financial specialists at Rocky Mountain Credit Union today.
If you enjoyed this blog, take a look at some of our other related articles:
- The Best Mobile Apps for Managing Your Money
- Credit Unions vs. Banks
- How to Create a Budget In 6 Steps
