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It will save you money

Making a budget is essential for your financial well-being. When you have a plan in place, even the roughest of recessions won’t be able to pull you under. But beware, purveyors of payday loans – if you aren’t careful, you can fall prey to one of the top 10 budget mistakes.

Having two household incomes – because you need them

If there is a second income in your household, it’s nice to be able to use that one for savings. That said, too many people have a second income to overextend their credit, especially when buying more home than they need. What happens if one income dries up? Live within the means of only one income and you will be more economical, and safer.

Not putting money away

Savings accounts, college funds or even rainy day funds. Whatever you choose to use it for, you need to set small portion of each paycheck aside. It will pay to be prepared!

Overspending

Will that hole in your soul really be filled with a new television? If your old one works just fine, seriously consider whether you need a replacement. Impulse purchases can be deadly, so make sure your budget focuses on what you really need each month. Sure, there should be some money earmarked for entertainment, but you must be disciplined enough to stay within the boundaries. When you shop, look for sales and the best deals.

Not recording expenses

When your budget is young, this is essential. Record purchases in the register of your checkbook, Smartphone, or a notebook, and create visual proof you're following your budget. Eventually you will get the hang of it and won’t need to record things right away, but if you start to notice trouble, don’t be afraid to go back to recording it all.

Going credit crazy

This is very symptomatic of overspending. If you don’t have the money for something, don’t buy it. Credit enables overspending easily, and long term revolving interest gets expensive quick. If you have to use credit, try to pay it off as quickly as possible and not carry a balance.

Being too charitable

This one might sound odd, but it’s obvious, isn’t it? There's nothing wrong with generosity, but your own bottom line comes first.

Going overboard with birthday parties

Parents of young children may know about this one. I don't mean how much to spend on junior's gift, but on party guests. Giving goodie bags is a common practice for kids, but is it really necessary? Games, cake and ice cream – for free – should suffice.

Too many bills

This is why it’s useful not to go crazy with credit cards. Housing and utility bills are unavoidable, but you really DO need eight or nine credit cards? Too many bills can lead to errors and omissions, and more money that you have to pay.

Being afraid to ask for a raise

If you are valuable to your employer, make sure they know. If you don't think your pay is consistent with what others in your field are paid, discuss it with your superiors. If you are valuable, an employer will consider it. If your employer won’t do it, consider improving your skills and education so that you can perhaps find a better job.

Not creating a budget

A person without a plan is a person who will soon be parted from their money. Payday loans are a tool you can use as assistance, but they are not a long term solution, whereas changing habits and better budgeting are.

Tags: budget, budgeting, financial management, Financial Planning, income