Six Ways to Destroy Your Budget

Start the New Year right and stick to your budget. Let's look at a few budget-busting behaviors to avoid!


1. Carrying a lot of cash.

Everyone knows that paying with plastic is a bad idea, but carrying around a lot of cash can be an even worse habit. Cash can give you the feeling of having some fun money that's just sitting there. Carry only enough cash for what you need, and leave the rest in the bank – even better leave it in a savings account that will pay you interest. Avoiding plastic is great, but don’t blow your budget just because you have some “extra” greenbacks. If you like cash try budgeting it with envelopes: one for groceries, one for entertainment, etc.

2. Saving your credit information with on-line vendors.

Online shopping sites which save your address and credit card information and even have one-click ordering buttons so you can buy something in just a second are places where destroying your budget is waiting to happen,. It's very easy and very dangerous. Not only can this easy shopping put you in deep debt if you're prone to impulse shopping, it also eliminates the feeling of spending money, because all you do is click. Never allow vendors to store your credit card information and avoid signing up for e-mails and catalogs if those tempt you to shop when you really shouldn't. It can be great to know about a sale, but if you don't need anything, it's just another temptation.

3. Window shopping.

It can be fun to browse the aisles and see what's out there. Everyone has a weak spot, like home goods, electronics or clothes. If you don't like to go to the mall you don't even have to leave the house to go window shopping; catalogs, the Internet and commercials advertising the latest sale can replace walking around the mall and can be just as tempting. Window shopping is a bad financial habit that takes some discipline to break. Staying away from your favorite retailers and not requesting catalogs or e-mail updates from your favorite stores is a good place to start. Before buying that latest item you pine for, ask yourself two questions: Do I need it, and can I pay cash for it? If your answer to either or both is no, walk away.

4. Emotional shopping.

It was a good week, or maybe a tough one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that nice meal and to make things better it was also on sale. Letting your mood dictate your buying decisions is the quickest way to go broke. Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost a lot like treating yourself to a movie or spending some quality time with loved ones.

5. Clipping coupons you don't need.

Everyone feels the pinch in this tough economy, especially when buying groceries. Clipping coupons is very trendy today, but is it really a good habit? Getting 50 cents off that package of cookies or that brand-name detergent is a discount, but you may be surprised to find that your grocery bill isn't going down despite all your coupon clipping. The truth is that buying generic brands which are just as tasty is often cheaper even without a coupon. Furthermore, coupons can make you buy things you didn't plan for and really don’t need. Start with a grocery list for the week and then look at your clipped coupons. If you can use one, great, but also try supermarket brands for the best bottom line.

6. Not planning ahead.

It's Thursday, almost the end of a long week; you're tired and you have no idea what you'll make for dinner. A great night for takeout, right? Using data from the Bureau of Labor Statistics, it's estimated that the average family of four spends more than $4,000 per year on eating out -- a very expensive habit that will destroy your budget in a hurry. When you make your grocery list, make a menu for the week at the same time, so you always have ingredients for a meal. If your week is hectic, try cooking on Sunday and freezing meals for the week. Plan for lunches the same way; not only will you save money, you will eat healthier by avoiding fatty restaurant food.

The bottom line is that It takes some discipline to break these bad habits. With some planning, restraint, and avoiding tempting situations, you can break these habits, and maybe even find you have a little extra cash at the end of the month!