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Have you taken a good look at your budget? Like, a really really good look at your budget?
We create budgets, make adjustments and then move on to the next month. Not sure about you, but I’ll be the first to admit that I’m guilty of falling into this cycle! There are occasions when I don’t pay my budget any attention or I pay it too much attention. It all depends on what I’m trying to accomplish for that particular month. Hey, can I keep it real? I’ll admit that I pay attention to recurring monthly expenses such as student loan payments and household bills. However, I rarely pay attention to monthly bank fees, cell phone repairs, dining out and automotive expenses.
Last month, I heavily scrutinized my budget. When I did this, I realized I have budget busters. According to the Coin Countin Dictionary (you like how I just threw that in there right, lol) a budget buster is something that breaks, overflows or causes an extreme change to your budget. In a nutshell, it’s something that can drain or suck the life out of your budget over time. FYI – if there’s a legitimate definition for budget buster, y’all please let me know!
Here are four budget busters that destroy your budget and some helpful pointers to avoid them.
Budget Buster #1 – Monthly Bank Fees
Do you remember that good ole era of “free” checking/savings accounts? Man, this era was shortlived and it’s evident that the best things in life obviously aren’t free.
A few years ago, Bank of America decided to implement a $5.00 monthly maintenance fee for savings accounts. What the what?! Yes! This fee would be waived as long as a minimum daily balance of at least $300 was maintained or if another account is linked to a regular savings account. At the time, I griped and complained about it but guess what ended up happening? Absolutely nothing. I left my savings account at this bank and I gave them $120.00 over the course of two years!
Do you know what I could’ve done with that money? I could’ve paid bills with that money or applied those funds in a savings account. I am no longer going to pay a bank to house my coins. Why should I be penalized for using MY OWN MONEY?! Chile, please. They can forget that.
The Budget Solution:
When I realized I was throwing money away, I decided to take my money out of this bank and move it to Ally Bank. Since moving my funds, I am:
- Saving $120.00 annually
- Gaining a higher annual percentage yield
- It costs ABSOLUTELY NOTHING to house your funds at Ally Bank.
Isn’t God good!!
Budget Buster #2 – Cell Phone Service/Repairs
What is one thing you can’t live without? For me, it’s my cell phone. My cell phone is my lifeline. If I leave home without it, I will turn around to go back and get it (depending on how far away I am). If something were to happen to my phone, I will do whatever I need to get it repaired ASAP! This mama doesn’t play about her phone.
Let’s keep it 100, these cell phone companies are out here making a ton of money. Think about it, (1) you either buy or lease a phone, (2) definitely need a service plan to use the phone. At some point, the phone will break and you will need to (3) repair the phone. You know what this means right? You are paying a lot of money for cell phone service.
Right now, I am paying on average $135 A MONTH for service. That is roughly $1620 a year!! Last year I dropped my phone and I was informed that it would cost me $250 to replace the screen. I have insurance on my phone (which is a complete waste of money – BTW) and it did not even put a dent in the repair cost. It was cheaper for me to get a new phone as opposed to paying $250.00 for insurance.
The Budget Solution
To scale back on these cellular expenses, do the following:
- Eliminate Phone Insurance. Let’s keep it real when your phone breaks nine times out of ten what you’ve paid into your cell phone insurance isn’t even used! It’s a complete waste of money. Stop paying $9 – $11 monthly on this expense. Eliminating this expense will generate a cash savings of $108 – $132 annually. Instead, place those funds into an account that will go towards a replacement phone (if you ever need it).
- Keep Your Phone Longer – This one is touchy. I had a phone for about 4 years and the developer sent an update that destroyed my phone and I had no choice to upgrade to the newest model. If you can hold on to your phone for as long as possible. It’s tempting to be swayed by the latest technology that the new phone has to offer but be realistic. Do you really need it? The better question is are you going to use those features?
- Switch Mobile Carriers (Companies) – If you’ve been with the same company for years and it doesn’t seem like the relationship is going well. BREAK UP WITH THEM! There’s nothing wrong with shopping around and selecting a company that provides what you need for the right price. Ask your friends, family members and coworkers about their service. Research options online. Stop wasting your money!
Budget Buster #3 – Making Late Payments
Did you know that making late payments can result in additional money owed from you and a decrease in your credit score? Oh yes! It doesn’t matter if you’re one day, 10 days or 30 days late.
Falling into a habit like this may be hard to break in the long run. I’ve made late payments in the past and I deeply regretted it. Having to pay an additional fee in excess of $35 on my next billing statement was a tough bill to swallow! I could only imagine what that fee could potentially be if I continued to miss the payment due date. Consequently, making frequent late payments on your bills could cause your account to become delinquent or perhaps sent to collections. If you know anything about collections, this is not the route to take. Unpaid accounts that have been sent to collections will ultimately cause more damage than a late payment.
The Budget Solution:
- Pay bills on time. It’s as easy as that. If your paychecks don’t fall in sync with each other, you can always implement the half payment budget method when paying bills.
- Call the creditor and request the late fee to be waived. I’ve done this and it works. However, you must be in good standing with the creditor. You cannot continuously call them every time a fee is late. They’ll give you forgiveness for one fee as long as your payments have been consecutive over the course of 12 months.
- Automate Your Payments. If you’re not good at remembering when your bills are due, automate them. Payment automation helps those of us who can’t quite remember when to pay bills.
- Set Alerts/Reminders on Your Calendar. I use the calendar feature on my phone to remind me that I have upcoming bills due. These alerts remind me about upcoming bills and it gives me a heads up to expect a withdrawal to come out of my bank account.
Budget Buster #4 – Dining Out
Dining out is always a simple fix to the age-old question “what’s for dinner”. You have to admit that it’s nice to have someone else prepare a meal for you and it’s delicious. However, it can get pretty expensive if you continuously fall into this habit. I am a sucker for Chick-Fil-A, however I’ve had to scale back in order to save money.
There was a point in time when I’d eat out during the week and I found that I was spending $50.00 A WEEK! That’s $200.00 a month which equals $2400 annually ON FOOD! When you look at the big picture, it helps you easily identify that you have food to eat at home.
I wish I could tell you that it’s easy to stop eating out but I’d be lying to you if I said so. I will say that scaling back is easy but it does take a lot of strength and resistance to doing it.
The Budget Solution:
- Take baby steps. If you’re accustomed to eating out every day at work, start packing your lunch. Treat yourself to Chick Fil A or another restaurant on payday. Give yourself something to look forward to.
- Just Say No. Avoid social pressure to eat out. Let your peers know that I’m scaling back at this time, if they treat you then that’s one thing but if you have to pay there’s nothing wrong with saying NO.
- Shop Your Freezer/Pantry. According to CNBC, Did you know that Americans waste $1500 annually by throwing out food? It’s time to stop wasting money and eat what’s at home. Shop your pantry and your freezer. I can guarantee that you can make several meals with what you already have purchased.
Beware of little expenses. A small leak will sink a great ship.
These four budget budgets can severely affect your budget if you’re not careful. It’s important to pay attention to these items. As you can see based on my examples, they can add up. I don’t know about you but I’d rather have an extra $1500 in my bank account as opposed to giving that money away in late fees.
As you continue to work on your budget, pay attention to these small expenses. If you’re not careful, these budget busters can destroy your budget.
Related Reading
• How to Stop Living Paycheck to Paycheck
•How to Start A Budget and Stop Wasting Money
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