You did everything right. You analyzed your expenses, allocated money for savings, and made a realistic budget for 2015. Now, nine months later, you’re wondering what happened and where it all went. Your savings hasn’t grown, and you’ve been pinching pennies for months now. Don’t worry, you can fix this.
What you can and can’t fix
Unexpected expenses happen. That’s why it’s important to have an emergency savings account. But it’s hard to build an emergency savings account when big (and unavoidable) expenses keep popping up. Sometimes surprise repairs or bills can’t be avoided. Other budget-busters can be fixed.
Looking for price over value
If you spent the year trying to save money by buying the cheapest products you can, your plan may have backfired. Whether it’s clothes, cleaning supplies, furniture, or appliances, sometimes you get what you pay for. A $10 shirt isn’t a good deal if you have to replace it five times as often as its $40 competition. The same quality concerns hold true for many purchases. Cheap cleaners often require using more of the product to finish a job. A $200 sofa is likely not constructed with the same care as an $800 sofa that will last you a decade or more. Buying the same products over and over again can cost you serious cash.
Buying in bulk, wasting in bunches
Did you try to cut down on household expenses, like groceries, by buying in bulk? Sometimes this really does work and saves you money. The trick is to only buy in bulk for products that can’t go bad before you use them. Unless you have a big family, buying groceries in bulk can result in a lot of waste. Plus, do you really want to eat the same kind of granola bars for the next 6 months because you got a good deal on a pack of 180 bars? Wasted food and household items equates to wasted money.
Splurge spending on a shoestring budget
If you try to reign in your budget by cutting out all luxury expenses, like meals out or new clothing, you might feel deprived of the things you enjoy. When that happens, you can end up splurging on items and luxuries you otherwise wouldn’t.
Think long and hard about what’s been going wrong with your budget. From now until the end of the year, focus on tweaking your budget or spending habits to see if you can get back on track. See what works for you and plan next year’s budget accordingly.