Biggest Household Budget Blunders

The biggest household budget blunders should be obvious to us all. But, many of us unknowingly make these big mistakes in planning our spending. These oversights can result in discouraging the best intentions.

Does your budget never seem to balance the way it should? Are you constantly digging into the savings to make ends meet?

It's time to take a good look at essential components you might be missing or you have not allowed sufficiently for in your household budget plan. Here are some of the most common budget oversights.

#1 Failure to Plan for Inevitable Expenses

We all have irregular expenses that we naively refer to as "unexpected." Come on, is that flat tire really unexpected? Don't you secretly know that these things happen? Have you ever owned a car that did not need repairs or maintenance? If you have, you probably didn't own it long enough. The solution; Start counting on the car breaking down instead of hoping it doesn't! Plan for these expense in your household budget.

The car isn't the only area we slight in the household budget. Do you find yourself hoping and praying that the hot water heater, washer, dryer, or some other major appliance doesn't need to be repaired or, worse yet, replaced.

Home maintenance is always a factor in our finances. Even if you rent, you probably have some home related expenses waiting to creep up on you.

These are just a couple examples of variable or irregular expenses that we often overlook in household budget planning.

When you consider the following other categories that could be included in this list, you can see the serious consequences this budget blunder can have on your budget.

Property, Auto, Health and Life Insurance - if not paid on a monthly schedule. Even if you do pay monthly, you should try to save for a lump payment if at all possible. Most companies charge up to a $3 fee for monthly payment options. It doesn't sound like a lot but, over a years time it's $36 you won't be investing in their cause. I say, it's always best to invest in yourself. Don't you agree? Plan for these expenses in your household budget to save money. Put the $36 in your savings!

Taxes - Property, Federal, and State - If you know you will have to pay Uncle Sam, prepare for it. If you value your home or other property investment, prepare for the costs. Don't scramble at the last minute to come up with enough to pay your obligations. If you do, it's likely other areas of your household budget will suffer greatly, since these expenses have a high priority.

Clothing - Now, I can wear a piece of clothing 'til you can see through the threads. I work at home, so I only have a few choice pieces for special occasions. I'm a no frills kind of gal. But, I have four kids. Do I expect them to stop growing or somehow not care how they look to their peers? Of course not! But, I'm working on it. Just kidding! I know that they will need more clothes, more shoes, more accessories, etc., etc., etc.

I use every resource available to me to cut down the clothing budget, I know I must account for this expense in my household budget plan. It will arise, whether I am prepared or not!

School Supplies - This is another one you just can't omit if you have kids. You can, however, use some clever money saving techniques when buying school supplies. Use multiple savings strategies and resources to keep this expense to a minimum.

Pet Care - If you have a pet, you most likely have expenses that come with this beloved family member. Vaccinations, flea control, veterinarian, and food are just a few that come to mind. Again, minimize the costs by using all your resources. Save money on pet supplies and keep you and your pet happy!

Tip: My local county animal shelter gives rabies vaccines for $5. Good for three years if regularly vaccinated. Does yours?

Gifts - If your friends, family, and kids don't care if they don't get gifts from you, if you've declared war on the holidays, or have a convenient hiding place when these occasions take place, then you can skip this one!

I'm guessing most of you are including this one in your household budget. It's inevitable. My best advice is to set strict limits and be a smart shopper. Seek out the bargains and buy when it's a deal, even if it's months ahead of time. Review low cost gift ideas to help minimize costs on gifts.

Medical - Unless you're lucky enough, or not lucky (depending on how you look at it), to qualify for medical assistance, you undoubtedly have medical expenses over and above the cost of your health insurance; Co-pays for doctors and medicines, over-the-counter medications, dental and eye care expenses. Nope, can't omit it, have to include it. Sorry, it's a must have! To help you out we've added some ideas for reducing costs on health care and medical expenses.

Vacation - If you have the income, include this one to make planning less stressful. Get inventive if you don't have enough income. You can still have a vacation with limited, or no, travel expenses. Frugal Vacations can be fun too!

#2 No Emergency Fund...

....or misconceptions about what warrants an emergency. An emergency is this case should be limited to an unexpected occurrence. No, if you've been listening, having to replace the water pump on your car is not an emergency. A real emergency might include; loss of income, severe illness, or death in the family.

Although we all hope such occurrences never happen to us, sometimes we aren't lucky enough to escape these unfortunate events in life.

You should try to set aside a specific amount, no matter how little, each month in an emergency fund to eventually equal at least three to six months of your current income.

I know this isn't possible for some people with substantial debt payments. But, when you have paid off those debts, you can apply those funds to help keep you debt free when emergencies arise!

#3 Living Above Your Means

This is simply spending more than you earn. Unfortunately, this is a direct consequence of household budget blunders #1 and #2. When funds are not set aside for variable expenses and emergencies in your household budget plan, you will inevitably turn to plastic money (credit cards) to bail out. Spending more than you earn is a sure sign that you're headed for trouble. When you spend future earnings it's like "counting your chickens before the eggs hatch."

The long term consequences are usually devastating. It's likely you'll end up in deep debt and eventually have no where to turn except counseling or bankruptcy. Don't let it get that far. Take control of your money. Now! Plan a household budget to prepare for your future.

If you've been making these household budget mistakes, you're probably exhausted just considering all the work you have to do on your budget. I'm exhausted just writing about it. The sooner you get started, the sooner you'll be on the path to a really successful budget.

To help fix these household budget mistakes in your budget plan, add up all your variable expenses and divide by twelve to come up with a monthly amount that you should be setting aside for these expenses.

If possible, start with 5-10% of your income to start a savings, or apply to an existing savings, each month for your emergency fund.

Make sure your expenses are within your income. If not, start reviewing, eliminating, and reducing those expenses to fit into your income limits.

A good household budget is like a good friend. It helps keep you strong and steady.

Household Budget Calculator - See how your spending compares.

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