How To Wreck Your Budget



Wait you can’t be serious...you must mean, 7 ways to STACK your budget. Nope. Maybe you do know ways to make your budget win. But you probably don’t realize some of those same things can wreck it. Once I started budgeting over 10 years ago, I realized I fell into some of the same pitfalls over and over again. I want to share them with you so you don’t fail like I did. This post is part of a collaboration of 5 personal finance bloggers. The tips from the other collaborators are below, to view the tips that I wrote, you can click to any of the other posts to find mine! How To Wreck Your Budget From Dani and Mike at https://BucksAndDough.com/ #1 Buying the fancy clothes to get your workout on You will not get stronger and more in shape if you have the fanciest and most expensive clothes. You can work and sweat just as hard if you are wearing a pair of shorts that have a hole in them and are stained then you will in a pair of brand new $100 shorts. You don’t have to look like a workout model to get a personal record (PR) on your back squat. If you think you have to fill up your drawers with the fanciest clothing to make you feel motivated to work out, then you need to reelevate the reason why you want to start getting healthier. Just start getting your heart rate pumping and start feeling better. #2 Not asking for your receipt when you purchase things If you don’t have a receipt, how are you going to be able to keep track of where your money is going? Short answer, you wouldn’t. You will just be wondering where all your money went at the end of the month. Start getting a receipt, plug it into your budget, then you can throw it away. If you don’t track where your money is coming in and out at, then good luck getting ahead with your money. Next time you are asked “Would you like your receipt?” your answer should be yes of course. Then when you get the chance, which should be within the next half hour, plug it into your budget. Easy. As. That. #3 Leasing that nice car, thinking it is less expensive By leasing a car, you aren’t gaining any equity in your car. When you are done with the lease, you don’t get any money back. If there is damage to the vehicle that will come out of your pocket. In most states, when you put money done on a leased vehicle you will need to pay taxes on that amount. In most cases, it will cost more to insure a leased car. For a financed or leased car, you have to include the name of the lienholder or leasing company as a named insured. Your best bet with a vehicle is to pay cash and not have to worry about a loan or leasing. #4 Paying for a storage shed to store things you haven’t paid off yet Storing things in a storage shed that you have to pay for monthly and then having to pay your monthly bill on the thing that you are storing is not going to help you save money and increase your net worth. That is like paying double of what your monthly payment is for that item. Stop paying to store something that isn’t paid for. And most of the time when things are in storage, they don’t get used as much as they should be. So if you get rid of the stuff in the storage shed then you also get rid of that monthly payment of the shed. A win-win!

https://BucksAndDough.com/ More about Dani and Mike: We are Mike and Dani also known as the Bucks & Dough Crew! We are a couple on the path to financial freedom through real estate and Entrepreneurship. And want to help others get out of the normal life and be more conscious of money. We strive to keep adventure in our lives through a budget because what’s life without a little adventure. We both grew up in Minnesota and met in Duluth Minnesota. Since then we have moved together to Ohio and Montana and found ourselves back in Central Minnesota. We are currently turning our house into a duplex, rent our house out on Airbnb, Dani runs a Nature Camp taking kiddos hiking biking and kayaking called Dani’s Nature Camp and Mike is a realtor specializing in hunting land and recreational properties. We love adventure and are the happiest outside. How To Wreck Your Budget From Kofi at https://400lbelephant.com/ #1 Giving money to family and friends unexpectedly. I have family back in Ghana and here in the US whose businesses have been terribly affected by COVID and have lost all sources of income. Well since they’re family of course I help them out but quite frankly it halts progress in saving, investing, and making progress in my financial journey. It might sound crass or cavalier but there’s no end date to coronavirus and giving endlessly while trying to get out of debt can slow down your progress. #2 Not price shopping or looking for coupons, especially for things like electronics or home appliances. Maybe you feel like you’re getting the best deal only to see the same product at another retail store for several hundred dollars less…womp womp.


#3 But it was on sale. It was a steal…Was it? You know they’ll run the same special for Labor Day, memorial day, mother’s day, father’s day, and any day they can use to lure you into thinking it was a good deal. Just because something is on sales doesn’t mean you need to buy it and it might not be a great deal. Ask yourself is it a want or a need? Can you budget for this and wait a little longer to get it at another time with saved money to buy what you’re looking for? If the answer is yes then trust me my friend it can wait #4 Uhh did you forget about your friend’s baby shower that’s tomorrow and now your scrambling for diapers, bugger sucker machines, baby wash, and mysteriously rack up a $78 bill at Target. I’ve been there. Roaming through the diaper aisle asking strangers with small children for suggestions for baby shower gifts. Let me tell you those gifts are expensive! Better to plan for these occasions and not ruin your budget. #5 Spending money you don’t have but plan on getting can wreck the budget. This doesn’t work so well or ever in my experiences. Sometimes we plan on a raise, a bonus, or a friend paying you back. Well maybe not the last one but a refund check. Some of us got a $1,200 stimulus check. Some folks spent every penny before the money hit their bank account or before their check arrived in the mail.


#6 My personal favorite. Spending money on food. Last night we took a walk after eating dinner pretty late and before we opened up the door, I was craving ice cream. I fought my urges to get a late-night snack. This happens when we’re grocery shopping and I walk past frozen pizza which is not on the list. The point is we budget food, snacks, desserts, and sometimes we act impulsively to buy pizza or sushi which can add up and be a budget buster.


https://400lbelephant.com/ More about Kofi: Kofi Gyebi is the founder of 400LB Elephant, a personal finance company that helps young professionals achieve financial peace. His coaching empowers people to get out of debt, save money, and build generational wealth. Kofi’s own debt-free journey is a testament to what is possible with a bit of focus and discipline: he paid off $34,000 of student loans in one year. He is a community leader, recognized as a Champion of Justice and Equality by the Urban League of Greater Atlanta. Kofi is a graduate of Bowling Green State University as well as the 2018 Leadership Buckhead Program and LEAD Atlanta, class of 2019. You can read about his story on his blog and find him on Instagram or via Twitter. His dream is to inspire a generation to become debt free and to start building generational wealth through empowering those who are ready to take the step to rid their personal debt. How To Wreck Your Budget From Roxanne at https://www.financerox.com/ #1 Banish it to a drawer. Drawers are where budgets go to die. This is probably the biggest mistake I see my personal finance coaching clients making: They take the time to draft a beautiful and ambitious budget and then put it in a drawer and never look at it again. How can we expect ourselves to stick to a budget if we never look at it and compare it to our actual spending to see how we are doing throughout the month? How many budget dollars do you have left? How much money have you spent? Do you need to cut back in one category since you over spent in another? Can you afford that $200 weekend trip you hadn’t planned? Banish your budget to a drawer and you will never know! #2 Not changing any of your day-to-day actions. Do you ever get to the end of the month and wonder: “Why didn’t I save any money this month?” It might be because you didn’t actually take any action or change any habits. Our money comes in and goes out every day. In order to capture some and save it for the goals we listed on our budget, we have to act proactively. To save more money we have to take more action. Whether it is a little thing like making the call to cancel that streaming service you haven’t used in months or a big thing like doing a weeklong “No Spend” challenge, we have to take action to make our budget work. #3 Buy a lot of beverages. To wreck your budget, buy all the beverages you can; whether it’s bottled water, alcohol, soda pop, juice, coffee or tea. Your new rule should be that tap water is beneath you. Seriously though, beverages have sneaky ways of wrecking our health and our wallets. They are sneaky because they taste so good and we can consume quite a bit and not really feel full. This affects our wallets too. The average American household spends about $2500 per year on just coffee ($1100), soda pop ($850) and alcohol ($550). That’s $208 per month for what is mostly empty calories! #4 Expecting yourself to change your entire lifestyle and all your money habits the first month you write a budget. I’m an ambitious person. When I set a goal, I want to see progress fast. This leads me, and many people, into an expectation that the first time we write a budget, we will miraculously spend $0 on discretionary purchases. This is just not realistic. It takes time to dial in a budget so that it is both realistically achievable yet ambitious enough to hit our goals. We need to be more kind to ourselves and really understand that each habit we have is deeply ingrained and will take time to change. The recipes we cook, the restaurants we visit, the shows and movies we enjoy, the activities we attend with friends and family; basically every aspect of our lives affects our finances. It just takes some time to chip away at those so that we can hit those ambitious budgets. It took about 6 months of budgeting for my husband and I to figure out a realistic budget that fit both our life and our goals.



https://www.financerox.com/ More about Roxanne: Hey I'm Roxanne from FinanceRox.com! I'm a personal finance coach, blogger, YouTuber and by day, financial analyst. I want to help people reduce their financial stress and find more confidence and joy in their finances by paying off debt and saving more money. Having grown up below the federal poverty line, money has always been my top priority. After graduating with my degree in Accounting, my husband and I went on to pay off $49,000 of debt and bought a $210,000 house in cash. Now we are saving aggressively for Financial Independence and our goal is to hit F.I.R.E. by age 39. How To Wreck Your Budget From Virginia at https://happyhealthyabundance.net/ #1 Forgetting to file for reimbursement Whether you have reimbursable child care expenses through a Dependent Care FSA, health care expenses through an HSA, or your standard work-related expenses for which you can file with your employer, you’d be amazed at the millions of dollars in reimbursable expenses that go unrequested each year in the US. I’ve seen it myself - coworkers with a drawer-full of unfiled receipts for which they could have received reimbursement randomly found old co-pay receipts from last years’ medical check-up, and more. As organized as I generally try to be, some things still slip through the cracks. However, if you have reimbursable expenses of any type, set aside time ASAP to sit down and figure out how to file for reimbursement. If you don’t file, you’re on the hook for that expense permanently. If you wait too long to file, it’s possible that the window for eligibility for reimbursement may pass you by. If you have an upcoming trip for work, for example, before you leave set an appointment for yourself on your calendar for the day after you get back that says “File for Reimbursement” with time blocked hour specifically for that task. Have you been to the dentist or doctor lately? Have that receipt handy? If you have an HSA or FSA, you need to file for that reimbursement quickly. As with many things, if it’s not planned for and time-blocked, it may not get done, and this is one task you can’t afford not to do. #2 Excluding purchases from certain places from your budget Have you heard the phrase “it’ll all come out in the wash?” It could just be a Southern thing, but it basically means that things have a way of working themselves out. Unfortunately, it doesn’t apply to money as my 20-something self would have liked. Amazon purchases didn’t used to be included in our budget. Since those purchases seemed peripheral and didn’t always fit into a certain category, I didn’t really know what to do with them. So, I ignored them. I always paid the bill, of course, and that always messed up other calculations I had going, but it took me months to integrate Amazon into my standard budget. While my story might seem crazy, I encourage you to think about seemingly peripheral purchases that you make. Some people don’t count treat-stops for coffee, bubble tea, or ice cream in their budget, others try to ignore medical bills or cash loans to friends. The truth is we’re all crazy for excluding ANYTHING from the budget - where else could the money possibly come from to cover that expense? One of my eccentric friends says shoe purchases don’t count (and wow does she have an impressive collection of shoes). In the same breath, however, she complains that it’s tough to make the bills each month. This is the classic behavior of someone who’s not willing to reduce or sacrifice their vice - exactly what I was doing with my Amazon purchases.


I later came to terms with the fact that I had an online shopping problem and enjoyed getting packages in the mail so much that I was willing to self-sabotage in other ways. So, what are your vices, your “just gotta have it” items? Are you buying anything outside the budget or that you’ve convinced yourself “doesn’t count?” " #3 Unplanned and short notice outings/events Short notice events, last-minute invites, and impromptu get-togethers have a tendency to wreck your entertainment budget. How can you possibly plan for something that wasn’t even on the calendar?! Better yet, how do you remain cool and “part of the crew” if you always have to say no to these outings because of that dang budget? I felt this tug-of-war strongly for a few years when we first started budgeting - we’d budget out everything - groceries, the weekly family night out, retirement, savings, and utilities. Then Joe at work announces happy hour and you begin to feel like everyone’s going except you. Ugh. There were times I went and subsequently felt guilty for days because I’d spent unplanned cash. There were times I didn’t and felt guilty for abandoning my team and missing the opportunity to get to know them better. I felt like I couldn’t win until… I learned about sinking funds! Sinking funds are a line item in the budget specific to costs that seem to pop-up. You can add sinking fund line items into the budget for things like birthdays and weddings, happy hours, and other (currently) unknown events that are probably going to come up. Sinking funds allow you to set aside money for the purpose of covering unplanned, sporadic events such as these with cash, guilt-free. What a relief! #4 Yearly or quarterly reocurring events that are forgotten and become an "emergency" Even though events like Christmas, birthdays, insurance renewals, taxes, school supplies, and vet visits occur each year like clockwork, somehow these are expenses that accidentally get left out of the budget month after month. I’ve been there too - realizing it’s October and nothing has been budgeted for the quickly-approaching holiday season is an awful feeling I wouldn’t wish on anyone. Yet, this happens all the time to people. I know you know what I mean - that panic ensuing moment when you realize your Mom’s birthday is in 3 days or when you realize your Anniversary is next weekend. It’s important we show up strong to these events and show these loved ones how much they truly mean to us, and often, that requires some cash to afford a gift. My best advice for this is to snag a full year calendar at the dollar store and go through it month-by-month, writing down important dates and noting times of the year when your expenses are typically higher and why. Consider summer daycare costs versus after-school care during the school year, sports seasons’ beginning and end dates, national holidays (like Christmas) and personal holidays (like birthdays and anniversaries), insurance renewal dates, yearly doctor, dental, and vet visits, and other events that may occur only 1-4 times a year. Becoming conscious of what events are within the upcoming 2-3 months will allow you to add a budget line-item for that expense and begin setting aside funds. Do this, and you’ll never pre-stress about an upcoming financial deadline or expense or holiday again!"


#5 Convenience is nice, but only if your budget can afford it. "Food” is the #1 budget category people complain about, and even before the current pandemic hit, more and more people were opting for the convenience food delivery offers. Whether we’re talking grocery delivery, packaged meal ingredients, or hot-n-ready meals, ordering grocery/food delivery provides convenience and pressure-relief from the whole meal planning and grocery list kerfuffle, but at a premium. If you haven’t allowed space in the budget for delivery fees, meeting minimum delivery requirements, or higher ingredient prices overall, and you’re just ordering to make life a little easier, I caution you. In comparison to my local grocery store visits in person, online grocery shopping (e.g. Amazon Fresh or Imperfect Foods) always costs more. Getting hot food (e.g. DoorDash or UberEats) or pre-packaged ready-to-cook meals (e.g. Hello Fresh or Home Chef) is always more expensive than cooking it yourself too, but I doubt I had to tell you that. Some people swear by food delivery and the stress-relief from meal planning and ingredients-gathering it provides, and that’s fabulous! IF they’ve budgeted for it. Based on my experience, Hello Fresh, Amazon Fresh, and even cool box subscription companies like Imperfect Foods cost as much as 20% more than what you’d pay at your local grocers like Sprouts or Aldi. If the convenience of grocery orders is high on your priority list, that’s totally fine, just make sure you’ve planned the budget wisely around affording this luxury." #6 Not accounting for seasonal fluctuations of expenses.  (Literal seasons & seasons of life) "One of the most subtle, yet most impactful ways to self-sabotage is to ignore the seasonal fluctuations of life. There are physical seasons like Spring, Winter, and Summer, but there are also seasons of life in which someone or something is not only the focus but also requires some significant cash. Just as we are resilient, flexible human beings, our money and our budget has to be flexible too. We have to account for the higher gas bill (heating) in the winter in contrast to the higher electricity bill (air conditioning) in the summer or the high daycare costs of having a young child in contrast to the league fees, electronics, and additional you’d provide for an older kiddo. There are seasons of life - times when home repairs, events, or medical conditions need a larger portion of the budget. Whatever is in the forefront of your life and your budget now likely won’t require that percentage of the budget forever. When that season of life passes, you’ll be able to adjust the budget and allocate money to the next, most important thing.


Allowing yourself to adequately adjust the budget when needed, based on life’s seasons, and giving yourself grace through the toughest seasons is key to maintaining a healthy relationship with your budget (and your money) and avoiding what could be a hidden wrecking ball. " #7 Home or Car repairs you weren't expecting. "You never truly know when a hail storm will blow through or when the timing belt on the engine will go bad, so these types of expenses are very common budget-wreckers. One of the top ways to wreck your budget is to NOT save for a rainy day. This means spending all and saving none of your bring-home income and ignoring potential expenses on the horizon. Haven’t had to replace your roof in 10 years? That’s great! But that’s also a sign that you may need a new one very soon. Oh, you haven’t had your car in the shop in 2 years? Impressive. That’s probably a queue that there may be car repair services needed sometime soon though. The trick to solving this dilemma is to put away a small portion of your budget (2-5%) into mini-savings accounts, separate from your emergency fund. These savings accounts can hold your homeowners’ insurance deductible (in case of that hail storm), $ 800 for new tires on the car, or $500-$2000 for car maintenance and repairs.   Look around and find things you haven’t paid for in a while or that you will need soon and establish a mini-savings account for it. Ally bank’s savings accounts online allow you to set up “buckets” where you can allocate money and avoid wrecking your budget. Planning well and being thoughtful about where your money is or will be needed is key."

https://happyhealthyabundance.net/ More about Virginia: I'm a mom of 2, a financial coach and professional podcast editor. I started www.happyhealthyabundance.net because my financial journey toward a better life for my family morphed into an insatiable desire for overall happiness and abundance. I've designed a life focused on true peace (mentally, physically, and financially) and want to share this with moms all over the world to help them achieve their ideal abundant life too. The more moms I can help, the more children’s futures are changed, and the accumulation of these changes for future generations is exponentially magical. I dream of a world where moms are empowered financially, where their kids grow up with money no longer being a taboo subject, and where mothers and children have the mindset and knowledge to manage their money in a way that brings them happiness their whole lives. FOR DISCUSSION: ***Which of these have wrecked your budget? ***What are your favorite budget saving tips?

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