As you probably know, sticking to a strict household budget can definitely help you financially speaking. However, there are some costly mistakes and traps that can quickly break your budget—no matter how great your intentions may be. These are some mistakes you definitely want to avoid:
1) Neglecting the small stuff
You may be careful about your big purchases, but do you pay attention to the small stuff? How much is that cup of coffee you buy every morning? Do you really need to buy lunch instead of bringing a packed lunch to the office? These may seem like minor expenses, but remember that they do add up. It helps to start jotting down every single expense each day to realize just how much you are really spending on the small stuff.
2) Relying on your credit or debit cards
It’s incredibly easy to overspend if you resort to using your debit or credit card every time you’re running low on cash. Keep close track of the purchases you make using your cards. If you lack self-control, force yourself to live within your means and leave the cards at home.
3) Building up your emergency fund
Open another account. No matter how many bills and debts you have to pay off each month, always make it a point to add whatever you can to your special savings account on a regular basis. Your savings will grow over time, and you’ll be ready the next time an unexpected expense comes along.
4) Forgetting the budget
So you have a budget for your monthly utility bills, household costs, transportation allowance, savings, and other expenses. This means that after distributing your income accordingly, you are free to spend what is left however you like. Be careful though, not to spend more than the amount you have left. You’ll be setting your future income back because you’ll technically be borrowing from next month’s budget.
5) Living on two incomes
Many couples have two incomes, and these partners often choose to set up their monthly household budget based on the sum of these two incomes. Unfortunately, everything can fall apart as soon as one of the two incomes is reduced or completely wiped out. The best way to do this is by making the best possible effort to live on just one income. The second income can be used purely for savings and unforeseen expenses.