We all have good intentions for our money, but life happens and things sometimes take a turn for the worse.
If
you're among the people who abide by a strict budget and have a hefty
cushion intact to cover emergencies, kudos to you. If not, you're likely
among the 62 percent of Americans whose finances would crumble if an
unexpected expense arose, according to a survey by Bankrate.
A bulk of the subjects surveyed had a spending plan, but were living
paycheck to paycheck and hadn't set aside money for an emergency fund.
Perhaps
you struggle with the same issue, or find it difficult to maintain the
fund as the money departs as quickly as it's deposited.
Either way, here are some money mistakes that may be wreaking havoc on your savings account:
1. Failing to plan your meals for the week
You
spend no more than a few minutes coming up with nutritious meal ideas
for your family and race through the grocery aisles filing up the
shopping cart without giving the prices much thought.
Following a healthy diet is paramount, but it can wreak havoc on your spending plan if you don't abide by the golden rules of grocery shopping.
2. Bad beverage habits
If
you're always on the go, preparing your own coffee can be a hassle.
Plus, you prefer the taste of Starbucks to give you the spark you need
for the day. If your budget is failing you miserably each month and your
savings account is picking up the slack, it's time you tread lightly
with the coffee shop visits.
Just one tasty beverage at $4 a day,
five days a week, amounts to a whopping $80 per month. And that doesn't
even factor in the sweet treats awaiting you in the display case.
3. Not anticipating deductibles
You desperately need good health and auto insurance, but you can't afford the high payments. So you opt for a higher deductible. That's often recommended as a way to lower insurance premiums.
However,
it's potentially hazardous. It could wipe out your savings account in
the event you haven't stashed away enough money to cover the deductible
plus meet other emergencies that could arise.
I learned this
lesson when I had a surgical procedure. A few minutes after showing up
for the pre-op appointment, I was notified I'd need to cough up $1,000
before treatment. Reasoning: I hadn't met the $500 deductible, and only
80 percent of the costs associated with the procedure were covered by my
plan. Fortunately, we had a fund for medical bills so I could make the
payment, but I hadn't anticipated that I'd have to pay out-of-pocket
before the procedure.
4. Ignoring your spending plan
Do
you pay your bills immediately after funds are deposited into your bank
account and then spend the rest, rather than sticking to your budget?
If so, how do you ever expect to build your cushion?
Or what
happens when a financial emergency arises, and you're forced to dip into
the small emergency fund you do have? Will you be able to replenish it
in the coming months?
