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Budgeting mistakes to avoid

130401_$BOX_PrintMoney.jpg.CROP.original-originalI know, I have just written an article on budgeting, but here’s something I have noticed a lot of people believe and constantly doing to save money but it’s just costing you more, so I thought this topic alone should earn itself an article.

The first thing we do when we start a budget is that, we get our hands into all the coupons in the world we can, which is great. If you are the kind of person, who can control themselves when a Black-Friday sale going on, or go into the mall without spending a penny, it’s perfect for you to put those in a coupon book or album so whenever you need that stuff you can just pull it out and save the money. But that takes a lot of organization, “clipping the coupons, put them in a coupon book in order, making sure of the expiration date, remember that you have the coupon and use it”. If you are an organized person, you my friend is a by born budgeter (if that’s a word). But if you are like me, as soon as I get the email about the sale on bath and body works, nothing can stop me. I stock up on lotions and body mist, but I may have needed that $40.00 for my credit card bill, which may end up costing me a late fee or interest charge. So, if you need to buy something hunt for coupon for that specific stuff. Remember you are using coupon to save money, not buying the product to use the coupon. That’s the trick we fell into by the big fat companies.

Buying in bulk doesn’t necessarily mean you are saving money. Here’s a real life foolish example. Last year when clay moved into this new apartment, it came with a connection for washer and dryer. How wonderful! We don’t need to get changes every time we do laundry. Instead of paying for the service, I can just buy the service! So he bought a washer and dryer, in a monthly payment plan. Another mistake! never buy anything unless you have enough money. Just paying the minimum every month is basically paying only the interest. I will talk more about how to pay off a big debt. But going back to washer and dryer situation, Austin is expensive. After searching for at-least 40 apartments we found a few that has washer and dryer connection but they also came with very expensive rent tag. But, “when I have the washer and dryer, why would I pay for that ? I will just get an apartment that has washer and dryer connection” So we spent extra $200 on an apartment. Now, if you were to do laundry in an apartment complex laundromat, you could probably get away with gathering dirty clothes and washing them twice or three times a week. But when you have a washer and dryer at home, for every little bitty thing you turn on the washer and dryer, costing you not only the soap but also your electricity bill is probably getting higher than the empire state building.. (OK, maybe not, but that’s how it feels like). So don’t buy something big to save little money here and there. Now you are probably thinking, “I am not going to buy washer and dryer” But do you remember that big jar of ketchup and mustard you got for cooking hotdogs? And you never really eat hot-dog unless, it’s fourth of July everyday?  Why buy that big jar then? Here’s an extra tip: if you are not into ketchup/mayo/mustard whenever you go to a fast food restaurant get those mini packs you can get for free with your burger, and save those, maybe for a sudden craving you wont spend extra money to buy more than what you need.

I can not say it enough, never commit to anything when your credit card bill is paid off. And when you are paying it off, here and there putting $20 may not be enough. After getting your paycheck put yourself in strict budget, put as much as you can, as soon as you pay it off, the air feels more fresh. Never keep a lot of money in your checking account. Either create another account to put it in or get a savings account. Having a lot of money on your  card may make you feel rich, but also will tempt you to spend more.Leaving you broke soon. It’s better to live like a broke person, than being actually broke (trust me, waking up at night with anxiety will decrease)

 

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