If you’re on a budget, the first thing you should do is congratulate yourself. The fact is, millions of people across the country still haven’t figured out that using a budget is the best way to build wealth, increase their savings, fund their retirement and avoid going into debt.
That being said, sometimes being on a budget can be mentally tough and, with spending “triggers” everywhere, there can be times when your budget is in danger of being busted. Below are a number of triggers that can do this, and advice on how to avoid them. Enjoy.
Trigger 1: Not knowing the difference between “need” and “want”. Humans have a way of justifying something that they want by saying it’s something that they need. For example, a person might say that they “need” the newest smartphone because they have to keep up with technology, or need to go out to dinner with friends because everyone is going to be there. In reality however these “needs” are actually just a justification for overspending, and the desire to “keep up with” everyone else. Your best bet is to simply focus on what you actually do need, not what you want. If the smart phone you already have is functioning correctly, purchasing a new one isn’t necessary.
Trigger 2: Rewarding yourself. Okay, sticking to a budget can be difficult, we know. Cutting back every day on everything can wear on you after a while and, if you’ve been diligently sticking to your budget, you may feel that it’s time to reward yourself. Many times a person who has just started a budget will feel this way and, in response to those feelings, overspend on something and throw their budget completely off. If that’s you, you would best start by cutting back on things slowly and working on your willpower, and your bank account, rather than jumping in to the deep end of the budget pool.
Trigger 3: Spending on vacation. Let’s face it, when you’re on vacation there are so many triggers around it’s ridiculous. Excursions, drinks out by the pool, spa treatments and more are around every corner, and keeping yourself from purchasing them can be quite difficult, especially since you’re on vacation to “relax”. If you’re planning a vacation, the best way to avoid these triggers is to set aside extra money to pay for the things that you know you’re going to want, so that you don’t break your budget and regret it when you get back.
Trigger 4: Purchasing something on sale that you don’t need. Oftentimes you’ll be in a department store and see something that’s on sale, maybe even at an excellent price. If you truly need it, and you have the extra cash, make the purchase. On the other hand, if you have to purchase that item using a credit card, or you simply don’t have the extra cash (or you truly don’t need it) that “bargain” might be a budget breaker instead. Even worse is if you purchase it and don’t pay off your credit card immediately, because then the extra interest you pay will end up negating any savings that you might have gained.
Trigger 5: Overspending because of a party or celebration. Let’s face it, there’s always some type of celebration happening in the average person’s life. Baby showers, birthdays, bridal showers, weddings, job promotions, anniversaries etc. etc. The fact is, there are an endless number of reasons to spend on a celebration but, if you destroy your budget doing it, those great feelings you have won’t last for long. One way to avoid this is to use your creativity instead of your money to give a nice gift to your friend or relative. Besides costing you much less, the sentiment that it creates will no doubt last longer than most things you could have purchased.
Using a budget, as we mentioned, is the best way to build wealth, increase savings, fund an emergency savings plan and also fund your retirement. That being said, the occasional splurge, if it doesn’t go overboard, is fine, especially if you’ve been diligently sticking to your budget. It’s really just a matter of balance and, the longer you use a budget, the more balanced you will be.