Most Common Budgeting Mistakes

It’s no wonder that January is the number one month for people to begin new financial endeavors, and nearly a third of people surveyed by GoBankingRate said their 2016 goals include “saving more and spending less.” At Honor Credit Union, this is music to our ears, as we love helping members save their money! BUT the big question is HOW are these people going to stick to their budget and be financially successful? By having a fail-proof budget in place, and knowing what the most common budgeting mistakes are and how to avoid them!

Here are the top five mistakes (and how to avoid them!):

1.      Failing to set a realistic budget- Many times, people feel overwhelmed by how long it takes to tack expenses and set a budget. Make time to sit down and tackle this project, as it will only help you in the long run.

2.      Using the exact same budget every month- This is a big mistake, as expenses differ each month, depending on holidays, birthdays, vacations, energy costs during warmer or cooler months, or unexpected home or auto repairs. Plan each month one month ahead, so you can make be sure to allot money for these particular expenses that aren’t recurring.

3.      Never allowing for wiggle room-  If your budget is too set, as in every penny is set aside for some specific expense, you won’t have anything left to pay for that unexpected car repair or other surprise expense. Be sure to set aside some money for these extra expenses.

4.      Relying on credit cards- If you’re relying on credit cards to make payments on necessary expenses, but then failing to make payments towards the cards themselves, you’re just digging yourself a huge debt hole that you may not be able to get out of. To avoid this, use cash only for the first few months of your budget so you can see where the money is going.

5.      Quitting your budget too soon- Many times, people will stick to their budget for a couple of months, then quit. Don’t do this! Successful budgeting takes time. You need to mess up a little in order to figure out what you really need each month.

Remember- if you stick to your budget as closely as possible and make budgeting a part of life and a long-term commitment, you’ll ultimately end up financially successful!

Don’t forget to follow us on twitter @honorcu and let us know what you want to hear about next week using #askhonorcu! 

To hear 97.5 Y-Country's Mark Durocher and Honor's Kaylee Williams talk about New Year's Financial Resolutions, click on the Mason Jar Monday episode below!

 

How To Make 2016 Your Best Financial Year

Something many of us still have trouble with when budgeting is curbing our frivolous spending and remembering to pay ourselves first! But these are crucial steps towards reaching a goal of personal financial success. To get a leg up on your finances for 2016, start by finishing 2015 with a big financial bang!

Follow these steps:

1. Start automated payments (if you haven’t already!)

• If you’re a spender, not a saver, and have trouble making your payments every month because of this, start automatic payments. This way, your payments are made on time, and you find your credit score going up while your frivolous spending and loan amounts go down

2. Get a financial advisor

• Not everybody is money savvy, but everyone is responsible for their own money. Call up your local credit union and begin talks with a financial advisor. They can help you ensure your future financial success.

3. Create small, specific, yet achievable, savings goals

• Make SMART goals (Specific, Measurable, Accurate, Realistic, Time-bound). Be sure you KNOW what you are saving for (pay off a credit card, save for a trip, etc.) as this makes it easier to attain your goals.

4. Ditch those Friday nights OUT with friends, and opt for Friday nights IN

• People are more likely to spend if their friends are spending. Eliminate the problem by avoiding those spending traps by opting to stay in, instead of going out.

 

Keeping your finances in check can be easy as pie, if you put your mind to it. Keep your money on your mind, and you’ll see your nest egg grow as a result!

Don’t forget to follow us on twitter @honorcu and let us know what you want to hear about next week using #askhonorcu! 

To listen to Y-Country's Mark Durocher and Honor Credit Union's Scott McFarland talk about having your best financial year yet, click on the Mason Jar Monday episode below!