Common Budgeting Mistakes

Most of us think we are pretty good at estimating our monthly expenses. We account for all the bills that come in every month like cable, water and heat, car insurance and loan payments. We even remember to include such things as groceries, gasoline, and other miscellaneous expenditures.
But our monthly expenses actually add up to a lot more than we typically account for.

The only way to determine with any degree of certainty what your true expenses are, is to keep a running count of every penny you spend for a few consecutive months, and then work out your average from there. Other, more significant expenses that don't typically get mention are things like getting a hair cut every six weeks, or passing through the car wash once a week.

How much is your house really costing you?
Sure, you are factoring in your mortgage, because that is a monthly expense, but what about the insurance and taxes which you only pay once a year? Are you remembering to include the random purchases like a new DVD player? Have you purchased any new home décor items recently, like trendy candles or new tea towels?

Clothing is another category that is often completely underestimated. If you keep track of every purchase for a few months, or a year, you will find your clothing costs to be much higher than you might have guessed. Every pair of socks, every belt, every scarf, pair of gloves, accessories…or a new coat, these are not paying for themselves.

We often do not account for emergencies or set aside a fund for unforeseen expenses like a spontaneous weekend getaway, or minor car repairs. Regular dental or optometrist visits often fail to make the budget list, too, but they are a very significant and very real cost.
When you really sit down and think about everything that you spend money on, no matter how small or large the amount, the budget suddenly takes on a whole new shape. If you have a consistent monthly income, you can structure a realistic budget based on all of your actual expenses, and work out a plan for allowing for all the little unforeseen expenditures that can really break the bank if left unaccounted for.

Source : articlesbase.com

Debt Relief tips that work!

Learning money management skills is fundamental to a financially secure life. If you don't learn how to manage your money and allocate it properly, you will likely have a hard time planning and succeeding at many of your goals. Some people learn these skills from their parents while growing up. Others struggle through their adult years until they have the opportunity to learn the information.

Saving

Learning how to save money is an important money management skill. Even if you only save a small amount each month you are ahead of the game. Put it in a money market or savings account so that it can garner interest. You should always have savings in place, whether it's for retirement, an emergency fund, or saving for a home.

Setting Goals

Another part of money management is to master goal setting. This goes in line with saving money. Look to the future and determine where you would like to be in five to 10 years. For example, perhaps you would like to purchase a home at that time or pay off your student loans. Choose a particular month and year in the future that you plan to reach a financial goal. Determine the amount that you need to save each month to reach that goal. Open a savings account just for that particular goal.

Budgeting

Learning to create a monthly budget is another money management skill. Budgeting is a key to achieving your goals. To create a budget, calculate your monthly bills and expenses. Include all expenses' both large, regular bills such as rent, and smaller, easy-to-overlook expenses such as gas and lunches out. Find out what you are spending your money on and where. Line up your budget with your income and set limits as to what you can spend on each specific area.

Avoid Bad Debt

To manage money effectively, avoid debt whenever possible. In particular, avoid "bad debt." This refers to debt that accrues interest or is used to purchase a disposable item. Credit card debt is typically an example of bad debt. "Good debt" is the type that builds wealth over time, such as the cost of a home or education that can lead to a better job. It's acceptable to take on "good debt" as long as you can afford the payments.

Source : debtrich