Sticking to a budget is more than just keeping your spending under control. Yes, that’s important, but unexpected financial pitfalls can completely blindside you and wreck your budget, too. These fall under three basic categories.
Financial writer Trea Branch rounds up three general pitfalls that can wreck your budget. Here they are, along with a few tips for managing:
More important than our practical applications of frugality (say through our $0.39 rice-and-beans lunches) is our shared financial outlook, which guides how we’ve decided to structure our lives. Mr. Frugalwoods and I feel incredibly fortunate that we found each other and evolved together into the frugal weirdos we are today.
Our united approach to money enables us to pursue our goal of quitting our jobs, reaching our version of financial independence, and moving to a homestead in the woods of Vermont in 2017 at age 33. To facilitate this, we’ve attained an aggressive 71% savings rate (not including maxing out both of our 401Ks). I can say with confidence that neither of us would’ve had the discipline or vision to achieve this by ourselves.
Whether you’re struggling to get your debt under control or simply want to build up an emergency fund or a down payment as quickly as possible, a bare-bones budget is a powerful tool to help get you there. It’s just what it sounds like: your essential expenses, and nothing else.
A simple, stripped-down budget can be helpful for an aggressive savings plan, but also if you experience job loss, take a pay cut, or need to pay down debt. Even if you don’t need to go bare bones now, you never know when you will. Since my husband and I are self-employed, we plan our spending around a basic, bare-bones version of our budget that we modify each month based on our fluctuating income.
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Do you often find yourself scratching your head at the end of the month because it seems like there should be more money left? The only way to really know and fix your spending leakage is to keep track of every penny that comes in and out. It’s pretty easy these days with sites like Mint or Personal Capital.
I use Ting for my phone service. We’ve gone from spending about $150 down to $70 using the same amount of minutes, text, and data.
This week they have a great budgeting article.
If you’re trying to figure out where to start with money management and aren’t quite interested yet in outside help, here’s a great free online budget tool that you can get started with.