It happened again. You started the month determined to keep spending within your budget, only to come up short on contributions to your retirement and other savings.
How can this be?
Many factors can steer you off course on monthly spending, but a few particularly common culprits are often to blame. Here are five budget busters and some smart strategies to beat them.
1. Subscription Services
Premium sports and movie channels are great fun, but subscription creep is common as more channels join your viewing rotation, monthly charges increase over time — and free trial periods quietly end.
Smart savings strategy. Cut back channels to just your favorites. Avoid in-app purchases and only watch shows included in your programming package. When possible, replace premium services with free or lower cost, ad-supported plans.
2. Unexpected Repairs
Things break — that’s life. Computers crash, TVs stop working, appliances wear out, cars break down and phones get dropped. And it can be hard to stay on budget when they do unless you take steps to prepare.
Smart savings strategy. You can’t expect things to never go wrong, but you can establish an emergency fund of at least three-to-six months of expenses for when they do. Good maintenance habits can also help minimize repairs. And be sure to take advantage of any purchase protection that might be available for items bought with your credit card.
3. The Urge to Splurge
We’ve all walked out of the grocery with “extras” we didn’t plan on buying or come home from the mall with a new sweater that was too good a deal to pass up — or given into the desire for a pricey mochaccino at the coffee shop. While occasional indulgences are rarely problematic, frequent ones can add up.
Smart savings strategy. Bring a list to the store and avoid recreational shopping. And don’t grocery shop when you’re hungry — going to the supermarket with an empty stomach increases the chances that you’ll leave with a loaded cart. Spend cash to help keep credit card balances under control and set limits for online shopping (it’s just too easy to “click to buy”). If a purchase is beckoning you, consider layaway or wait to see if the urge passes.
4. Dining out
Eating at restaurants is a treat, but it can be easy to spend more than you intended. If your monthly restaurant tab is starting to look more like a car payment, there are things you can do to prevent your favorite eatery from taking too big a bite out of your budget.
Smart savings strategy. Limit eating out to once or twice a week — or month, depending on your budget. Instead of fine dining, try informal, less expensive bistro meals. Alcohol adds a lot to the check, so limit consumption when dining out. Split a meal or have an appetizer instead of an entree. Look for early bird or happy hour specials and swap out a steak splurge for a less expensive pasta dish.
5. Delivery Fees
You can get almost anything delivered today, from cat food to a new car. But convenience can come at a hefty price. Whether for meals, clothing or other online purchases, delivery services can make everything you buy more expensive.
Smart savings strategy. Drive to the store instead of paying delivery fees and forgo rush shipping. Don’t fork over hard-earned cash for meal delivery services, which often don’t even include tipping the driver. Eat in more — or use convenient curbside pickup instead.
And Most Importantly …
Whatever you do, there’s one way to prevent budget busters from derailing your retirement or other savings plans — and that’s to pay yourself first. Having retirement plan contributions automatically deducted from your paycheck is an effortless way to accomplish that. Put your financial future at the top of your budget each month to help ensure you can always afford what matters most.
