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Not having a budget to begin with.
This is just plain foolish. Yes, it will take some time to set up—and yes, you may need to sit down with your family and make some hard decisions when it comes to enforcing the said budget—but this is the foundation for any healthy financial lifestyle. Without a budget, you’re just winging it, and that’s a recipe for disaster.
Buying something just because you have a coupon for it.
There’s a reason companies put out coupons for their projects: to get you to buy them. (Duh, right? But it works.)
Just because you have a coupon for $1 off the fancy name-brand toothpaste, that doesn’t mean it’s necessarily your best deal; generics are often still considerably cheaper. Make sure you’re being savvy with your coupon usage by combining coupons with store sales and promotions to get the biggest discount and by keeping an eye on unit prices.
Caving under “limited time only!” pressure.
Sure, your local furniture store is having a President’s Day sale this weekend only, and you just happen to be in the market for a couch. But, chances are that same store is also going to have a March madness sale, a St. Patty’s Day sale, an Easter sale, and any number of other “limited time only” blowouts for any possible occasion they can think of.
So, don’t give in and buy something just because it’s on a time-sensitive sale. Do your research and comparison shop for the store with the best overall prices for the item you want—then wait for it to have its next “limited time only” blowout to get a real bargain.
Opening store cards just for the discount.
If—and only if—you can regularly pay off the card balance in full every month, then opening credit cards at the stores you regularly shop at can be a smart move. But, that 5% off each purchase won’t do you a lick of good if it just tempts you to buy twice as much stuff, then making it impossible for you to pay more than the minimum balance each month. Any discount at the register will quickly be eaten up in interest charges—which will just keep building the longer you take to pay down the card.
Playing the balance transfer game.
If (and once again, only if) you’re able to keep up-to-date with your credit card payments and are steadily paying down your cards, then transferring a balance from a high-interest card to a lower-interest card can be part of a smart plan of attack for chipping away at your debt.
But, most people don’t use it this way. Instead, they play the rotating balances game to buy themselves more time while they continue to get themselves into deeper and deeper debt. If you’re having trouble making your payments or are beginning to feel overwhelmed by the amount of debt you’re carrying, seek professional help through a debt relief program. Don’t play the waiting game; every month you wait, more interest piles up.
Not having an emergency savings plan.
One of the biggest budget-busters is that sudden big expense you weren’t planning on. Your dog gets sick, your car breaks down, the pipes in your basement burst.
Even the best budgeters can be derailed by unexpected costs. So, plan for the unexpected by building up an emergency fund to have on hand for those times the unexpected inevitably happens. If you have to trim down some areas of your budget to make this happen, do it. It will be worth it.
***Photo courtesy of http://www.flickr.com/photos/59937401@N07/7214443324/