Don’t Make These Five Budget Errors

Have you ever investigated the working habits of citizens in other industrialized nations? You might be surprised to learn that many people throughout the world work shorter hours than we do, and they take longer vacations. For example, it is not uncommon for Europeans to take month-long summer vacations, whereas in the US most of us only take a week.

It seems like we’re working harder than many others, and yet we retire later. Why is that?

Culture throws a number of variables at us, so we certainly can’t pinpoint a single cause for this phenomena. But we do know that more than three-quarters of Americans live paycheck-to-paycheck, with little to no savings in the bank. And, 71 percent of us are in debt. We certainly work enough, but we’re also spending too much and saving too little.

Sticking to a budget can be a challenge, especially when you’re too busy to keep track of your spending. But for most of us, taking a few moments each day to manage bills and other matters can go a long way. In particular, look for these five common budget errors, and eliminate them.

Credit card interest. With the average household spending $1,292 on credit card interest each year, it’s easy to see that eliminating credit cards would make a big difference in your saving power.

Bank fees. We’re paying 17 billion dollars in bank fees annually, and much of those fees are due to overdrafts or insufficient funds. Paying closer attention to your checking account, and switching to a bank with lower fees, can reduce this money waster considerably.

Paying full price. We often feel too busy to bother researching or haggling over prices. But a few minutes of your time can save you money on just about everything you purchase.

Late fees. Each time you pay a bill late, your utility or credit card company tacks on a late fee. Managing your bills with a calendar or smartphone app can eliminate this waste.

Doing it all yourself. Some matters require professional advice, to avoid costly missteps. Remember to consult a tax professional about taxes, and meet with us to plan for retirement. We can help you avoid potential pitfalls or identify opportunities for improvements.