• Saturday, April 20, 2024
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BusinessDay

Be cautious, budget busters can destroy your plan

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While drawing up a b u d g e t m i g h t s e e m slightly difficult, sticking to a budget plan is even a much more difficult task. However, financial experts say by avoiding some pesky spoilers, your budget should be adhered to strictly, which ensures you stick to your financial plan for a specific period.

Debt is the biggest budget monster that ought to be destroyed before any reasonable financial growth can take place. When debt is out of control, the rest of your budget will not work effectively, financial experts say. Tackle it with every ounce of effort you can muster, ensure you slay it so you can make financial progress. Experts equally advise you desist from buying with credit cards, rather ensure you buy with cash, and equally abstain from taking small loans from friends and family members. If you are already indebted you can take on a second job for a while, and sacrifice all your wants and desires until your debt is beaten into submission.

The need to relax once a while is very important, however ensure it does not cost you so much especially if it is not included in your budget for the week, month or year. Also you are still in debt or struggling to meet an important financial obligation, spending so much for fun is ill advised, say Susan Sullivan, financial blogger. Rather engage in stress-releasers and vacation that cost so little or even free. For example renting a movie to watch at home is far cheaper than paying expensive cinema tickets better still dust off those old board games; invite some friends over for popcorn and friendly chat.

Soaring real estate prices, high lending rates and smaller down payments mean many families are shouldering bigger and bigger mortgages sometimes to their peril. It’s not just the mega-mortgage that knocks people off track, said Steve Rhode, president of MyVesta. com. More expensive houses come with: higher property taxes, larger insurance premium, bigger utility bill and more maintenance costs. Yet many people continue to struggle to keep a too-expensive house when a smarter solution might be to sell it and downsize, Rhode said. Purchase a home only if the mortgage, taxes, insurance and utilities combined do not exceed 38 percent of your total budget, financial expert’s advice.

Saving is certainly not a budget buster but shying away from saving surely is. Expert advice you have a specific percentage of your income always saved for the rainy day.

Whether it is your cable Company, mobile phone service provider, favorite magazine offering a “free” promo, ensure you set a notification on your phone or calendar on the day the promo expires, so you will remember to call and opt out of the promo. Many companies put your account on auto-pay, which implies once the “free” period is over; your account is instantly charged for the remainder of the contract or sometimes a year. Minor expenses as these can burst your budget.

In a century, where communication gadgets are more pronounced than ever, chances are that most people have a smartphone. These devices are quite helpful but equally costly maintaining. While you subscribe for internet, there are chances you will equally be tempted to download recent applications which attract charges. If you have not listed this in your budget you will amazed to see how much you have spent on your gadget by year end. Jacqueline Curtis, a financial expert advice you download free versions of apps, and turn off the “In-App Purchases” option on your phone, which can protect you from being charged when you upgrade to a new version of an app you have already bought.

 

ODINAKA MBONU