Creating, and then maintaining, a solid budget is one of the best things you can do for your financial life. It can be difficult to keep track of all of your expenses during the week while life is busy, so set aside some time on the weekends (or whenever you have spare time) to work on a budget and make adjustments as necessary.
If you can set a budget and stick to it for the long-run, your bank account will reflect your discipline.
Unfortunately, many budgets spring ‘leaks’ from time to time, and those leaks need to be plugged up as quickly as possible. Take a look in your own budget for any of the four leaks below, and take corrective action as necessary if you find that these points are costing you money.
How Much Food Do You Buy?
You can’t eliminate your food budget, obviously, but there is a good chance that you could trim it back while still getting everything you need to eat. There are two common ways in which money gets wasted within a food budget – going out to eat too frequently, and buying food at the store that never gets consumed.
If you can do a better job of shopping smart and avoiding waste, your food dollar will go a lot further.
Movies are Expensive
One of the sneakiest ways to blow through your budget is to go to too many movies during the course of a month. With all of the entertainment options available at home these days, you are spending more money than necessary to be entertained when you buy a seat at a movie theater. Sure, there is nothing wrong with going to the occasional movie, but limit this activity to keep your budget in check.
Excessive Monthly Charges
There are a number of other bills in your life, like food, that simply can’t be eliminated. For example, you need car insurance (if you own a car), health insurance and more. Even though you can’t wipe these away, you may be able to optimize them in order to save money each month without losing the coverage you need.
Work through all of your options on each monthly bill that you pay in order to make sure you aren’t sending more money out the door than is absolutely necessary. A great way to stay on top of these charges is to track your expenses with a free tool like Personal Capital. Not only does it allow you to track your expenses, but it also helps you monitor all your financial accounts in one location.
The Daily Coffee
Coffee used to be something that was cheap and a great way to start the morning. That has changed, however, and many coffee drinks are now a serious investment. With drinks from popular chains regularly costing $5 or more, you can do major damage to your monthly budget simply by stopping in for a coffee each morning of your work week.
If you can break this habit, you may be able to save as much as $1,000 or more in a single year! You don’t have to give up coffee totally, either – consider brewing some at home before you go for pennies on the dollar as compared to purchasing it from a coffee shop.
Does your budget suffer from any of these leaks? What other budget leaks do you suffer from? What are you going to do to plug them?
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