BORROWING MONEY is usually the age-old solutions of many when it comes to covering up expenses that can’t be paid. With a little understanding about money budgeting, balancing income and expenses and investing time to understand how your finances work is all one need to pull him out of repeatedly going to a money lender to solve his expense problems. The following are just some of the common mistakes an individual should be aware of and avoid when budgeting and controlling his finances.
Mistake #1: CREDIT and Credit Card to solve expense problems
It’s funny that when individuals discover that their expenses are more than what they make, the first solution is to borrow money to cover the expenses that cannot be paid. This is like putting out a fire with gasoline. Remember that frequent use of credit to cover expenses will only worsen your debt situation.
Mistake #2: Not Keeping Track of Daily Expenses
In order for a good budget to work, there is a need to track daily expenses. This will help realize, where all the money is going and this is a good way to find a leak in your budget and find out where you and/or the family is overspending.
Mistake #3: No Savings is put aside
To most earners, savings is not a priority or if they ever do save, it is spent almost immediately. Savings should be a made a priority if you want your budget to work. Just think of it this way; consider saving as an expense that you would have to pay a certain and specific amount each month and that same should have payment terms of say 24 months. If you will put aside about 5 to 10% of your earnings to savings, can you imagine how much you can save in 24 months?
Mistake #4: Juggling your Expense Money.
Never use your utility expense money or grocery money for other purposes like buying a new tire. Always make it a point to use the money for what it was originally intended for or you may just end up with higher credit balances.