Budgeting 102: What Can Ruin Your Budget and 4 Ways to Overcome These Hurdles?

Apart from creating a realistic budget, it’s also good to learn how to maintain and stick to it for long. But there are really times when you need to make unplanned expenses. As a wise spender, you have to know these situations, anticipate them and apply effective strategies to stick to your plan no matter what.

Creating a budget and sticking to it doesn’t mean you have to be very strict on following it at all. It’s also wise to learn how to adjust it to suit your real-time needs

4 Expenses That Can Ruin Your Budget and 4 Ways to Protect It

If you’ve already learned to create a budget, it might also do you good to know what can ruin it. This is one of the strategies that will ensure you’re always in control of your spending. So what are the worst budget killers? As per surveys and research, the following are the four major expenses that cause your spending plan to tip over:

  1. Special Events – The holidays, Valentine’s Day, your child’s graduation and vacations are occasions we usually spend more money on. Apart from these, we Filipinos are also fond of splurging on Fiestas, when we invite guests to dine and hang out with in honor of the saints.
  2. Repairs and maintenance – Home renovation and improvement, water system repairs and car maintenance are also occasional yet recurring expenses we need to consider to keep our dwelling and vehicle in top shape.
  3. Health-related emergencies – Hospitalization bills and medicines can also create a big dent in the budget, especially for those who don’t have any health or life insurance plan.
  4. Utility expenses – Electric bills, telecom charges and cable fees may also go beyond your budget, especially during special occasions and holidays when you use them more than the usual. Your electricity and water consumption may also increase during the summer months and the rainy seasons as you may have to use your air-con or heater more.

Losing control of your spending can lead to debt. So if you like to stick to your plan while managing these unexpected expenses, applying these tips might help:

  • Be an Essentialist Spender. Essentialists buy only the basics, delaying their purchase of luxury items and unnecessary products or services. By doing the same, you’ll save up some cash you can use for emergencies.
  • Anticipate expenses. You definitely know the birthdays of the special people in your life, as well as the holidays and events you’re willing to spend money on. So it’s wise to save up for these occasions a couple of months ahead to avoid resorting to loans and credit.
  • Save up your extra cash. Save the money you’ve had for emergencies, instead of buying luxuries. The jewelry and phone can wait until you’ve paid all your dues and when the anticipate emergencies are well covered.
  • Tweak your budget as necessary. The purpose of creating a budget is to guide your spending pattern, not to trap you into a state of deprivation. So, don’t hesitate to make the necessary adjustments to accommodate additional expenses you haven’t realized or considered before when you’re making the first budget. This is how you should roll if you are to create a realistic, long-term plan.

Creating a budget and sticking to it doesn’t mean you have to be very strict on following it at all. It’s also wise to learn how to adjust it to suit your real-time needs. For more guides and tips about personal financial management, call Loansolutions PH now, subscribe to our newsletter or drop us an email.

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Written by Jefanie Genilla

Jef is a storyteller, educator and digital marketing enthusiast and she travels for self-discovery, fun and community service. She writes for Loansolutions as part of her financial literacy advocacy. Jef strongly believes that it’s not necessary to be rich to travel. One just needs to manage time and money the right way and make informed financial decisions.

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