AVOID THE BUDGET BOMBS
Responsible saving and spending are easily sabotaged by these budget blunders.
- Don't cut out all the fun stuff
All budgets should allow for entertainment. Think about where your recreation priorities lie and add up how much you spend on those activities. If the total is way out of balance with your total household budget, it's time to scale back. But don't blunder by eliminating recreation altogether or you best-laid plans will self destruct. - Don't be hit or miss with savings
When it comes to money management, slow and steady wins the race. Once you've determined how much of your monthly income can be allocated to short and long-term savings, make your deposits consistent by having automatic payroll deductions. Consider opening an online savings account that offers a bigger interest rate. At RateCity you can search from 500 savings accounts to find the perfect one for you. By saving just $100 a month in an account earning 6% interest, you could accumulate approximately $6,977 in five years. - Don't overuse your credit cards
Money doesn't grow on trees, of course, but credit cards can certainly fuel that impression. Allot yourself a specific amount of cash for purchases during the week. Implementing a strict cash-only diet puts spending habits in perspective by forcing you to think before making that impulse buy. You could also use a debit card containing a regulated amount so you're not tempted to over-spend. If you still can't trust yourself with your debit or credit card, it's time to give them the cold shoulder. Put your cards in the freezer. There's no way they will swipe until thawed out, putting a dampener on your retail therapy plans. - Don't pay only the minimum on credit cards
There's no better way to perpetuate debt - or waste your money - than to carry a credit card balance. Making only the minimum monthly payments will cost you thousands in interest fees that could otherwise go towards savings or entertainment.
Of all the credit cards on the market, by making minimum repayments only -- 75% of the cards will not see a $2,800 debt repaid within 10 years
- 44% of the cards will not see a $2,800 debt repaid within 20 years
- 30% of the cards will not see a $2,800 debt repaid within 50 years
- Don't live without emergency savings
If you haven't set money aside for a rainy day, you're one job loss or illness away from financial hardship. Most people should save as much as they can to tide them over in the event of something unexpected happening. A high interest bearing savings account can be rewarding in this instance. Strong competition in the savings area means that there are some very good interest rates to be earned in online savings accounts. If you don't need branch access, this could be for you. For some people, the relatively restricted access to money in an online savings account is an added bonus, as it reduces the impulse to spend. RateCity's huge warehouse of products is your one-stop shop for searching, comparing and buying the right savings account to help get you on track financially. - Don't spend more than you earn
It's the cardinal rule of household budgeting - live within your means. In our instant gratification society, however, it's easier said than done. Experts insist living with less begins with changing your spending philosophy. Learn to moderate, resist reckless spending and don't go on a holiday until you've got the money in the bank. You will be pleasantly surprised at how gratifying it is to bid farewell to the financial treadmill.
To help you find the very best financial product to suit your budget needs, RateCity's huge warehouse of products includes 5 star rated products, awarded by CANNEX, Australia's leading financial research and ratings firm. CANNEX experts have analysed and evaluated hundreds of features in all products to give the full 5 star ratings to only the very top 5% of products. The range of products offered is incredible and includes mortgages, credit cards, personal loans, savings accounts and much more.
At RateCity you can compare all products by interest rate, preferred institution, or CANNEX star ratings.
Each product home page on RateCity provides invaluable information on the pros and cons of that product sector so you are armed with the knowledge you need to make an informed choice and keep your budget from blowing out unnecessarily.
Related Links