Creating a monthly budget and sticking to it is a rewarding way to rein in wasteful spending and save money. But there are times when you seem to have less money at the end of the month than your budget indicates. When the spreadsheet and reality don’t quite match, it may be time to take a deep dive into your spending habits.
Discovering and Eliminating These Expenses Can Help Get Your Budget On Track
Managing personal finances like a small business helps people save money for family vacations, a down payment on a home, and retirement. That being said, no one wants to feel so restricted they cannot do something spontaneous that costs a few dollars.
While it’s important to enjoy leisure time, there are a number of common spending habits that derail smart budgeting practices. By identifying the expenses that are flying under your radar and scratching them off your monthly balance sheet, you’ll have more money to achieve your financial goals.
5 Expenses That Are Throwing Your Budget Off
It’s not unusual to have a blind spot regarding inexpensive purchases. We all tend to do certain things out of habit and shrug off these nominal purchases, believing they have little to no impact on our overall financial strategy. But the cumulative effect of these purchases can throw off your monthly budget. These rank among the most common expenses that negatively impact even the most frugal consumers.
1. Impulse Purchases
Impulse purchases are often the leading reason budgets don’t balance. This category covers all those little expenditures that wouldn’t seem to have a significant effect on their own. The inherent problem is that impulse buys are typically not singular events. They become a slippery slope as one small purchase leads to another, and yet another. And just because something is on sale, doesn’t mean you “need” it.
Some items that you could end up buying impulsively on a day-to-day or weekly basis are:
- daily lattes
- beauty products
- electronic gadgets
- video games
Following a budget doesn’t mean you have to forgo the occasional impulse buy. By integrating a reasonable amount into your budget and adhering to the cap, you won’t be scratching your head at the end of the month.
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Incurring unaccounted-for fees is not necessarily a matter of poor planning or spending outside an established budget. Plenty of companies employ what we commonly call “hidden costs.” These involve additional annual charges on gym memberships, credit cards, checking accounts, cell phone plans, and internet services. When these unexpected fees crop up, consider either adding the cost to your budget or making a change. There are plenty of fitness centers that will waive fees. The same holds true of credit card companies and financial institutions. Community-based credit unions usually don’t slip in hidden fees.
3. Gifts for Others
According to a Gallup study, the average American spent more than $900 on holiday gifts in 2022. That figure does not account for gifts purchased for birthdays, graduations, and weddings among others.
When you add up the total cost of annual gifts, one would think it makes sense to create a line item and include a monthly average. But like impulse buys, consumers tend to view gift-giving as isolated expenses. Truth be told, they are actually reoccurring expenses connected to the expected milestones of family and friends.
Rather than have your budgeting efforts disrupted when the time comes to purchase gifts, consider assigning a reasonable number to this expense. You can look back at last year’s purchases to arrive at a ballpark figure. Add a percentage to account for inflation or set a hard limit if you overspent last year. It’s also feasible to lower gift expenses by taking advantage of sales throughout the year.
4. Food Waste
A surprising number of otherwise thrifty people throw away leftovers. In some cases, eating the same meal twice in a row feels less than appetizing. That’s why food sits in the refrigerator and eventually finds its way into the garbage bin. You may be surprised to learn many appealing recipes can be born of leftovers.
For example, stew, gumbo, stir fry, chicken salad, fried rice, omelets, meatloaf, veggie kabobs, and many others, can be created using leftovers. By printing out a few of these delicious menu options, you can repurpose leftovers and stop wasting money on groceries.
5. Unused Monthly Services
Accumulating memberships and subscriptions can throw a monkey wrench in an otherwise diligent budget. These expenses appear when you sign up for a free trial and forget to cancel before a charge hits your credit card. Then you keep the subscription for a premium channel or publication rather than waste the money. As poet Robert Frost once wrote, “way leads onto way” and you get dinged again the next month.
The same holds true of memberships to fitness centers, discount clubs, and a variety of others. We sign up to enjoy the initial benefit or to try it out, but then it becomes a recurring charge. It’s essential to draw a line in the sand and cancel unused subscriptions and memberships. By getting them off your credit card, they won’t be impacting monthly budgets ever again.
Budget Smarter with CCCU
Along with discovering and eliminating excess expenses, having a dedicated account to cover your expenses as well as a separate Savings Account can help with your long-term financial goals. If you have any questions about how CCCU can help with your budgeting and saving goals, contact us today!