Does your household presently live on a tight budget? Do you balance out every month with nothing leftover? It’s great that you’ve developed a system that’s allowed you to financially cover all of your expenses, but having a budget without a buffer could backfire. Unfortunately, life isn’t predictable and you simply never know when you might need additional funds to get something done.
A budget with no wiggle room doesn’t leave you with many choices. You can take the money you had set aside for something else and throw off your budget, sacrifice something you may have needed or wanted, or go into debt by borrowing the money or charging the extra expense.
Why You Need Wiggle Room
As none of the above-mentioned solutions seems to benefit you, it would be best to start creating some wiggle room - a few hundred or thousand dollars set aside. Here’s a closer look at why it pays to build a buffer in your budget.
Overages - Budgets require you to plan your finances a month in advance. It means giving an educated guess on what your bills will cost you each month. When it comes to bills that remain the same each month like your car insurance or mortgage, it’s easy to make an accurate guess. Yet there are bills that fluctuate like your cell phone or utility bills where your estimations won’t always be on point. If you didn’t set aside enough money for this bill, then you ruin your budget. However, a little buffer or even a few bucks could prevent it.
You’re Human - Here’s another reason to have wiggle room in your budget, humans tend to forget things. There’s always something that you pay out of pocket for that you completely forgot to apply to the budget. Perhaps it was a one-time thing like a birthday gift for a family member or something more frequent like pest control. If you need a company for pest control columbus, but you haven’t budgeted for it, you either have to skip paying another important bill, trying to get rid of the pests on your own, or borrowing the money.
Life Happens - As nice as it would be for life to always go according to plan, it doesn’t. As most happenstances in life are attached in some way to your finances, not having enough money in the budget to cover them could create more problems. One month you may need to hire a plumber, the next, you may realize that tuition has gone up at your child’s school. Since not all personal emergencies can be put off until you get more money the following month, it is best to have a little cushion you can rely on.
You May Want Something - Sticking to a strict budget can get depressing. For some, it can even cause them to ditch the budget altogether and fall into financial trouble. Sometimes, there are just things you want and if you haven't allocated the cash to get it done, it may seem like you're restricted from enjoying the fruits of your labor. Whether it's a vacation or a bathroom update, you should be able to dip into your budget to get something you want.
How to Create Wiggle Room
Wiggle room provides peace of mind, prevents you from going over budget, and keeps you out of debt. With that being said, how can you find wiggle room in your budget when things are already tight? Here are some effective solutions:
Sell things you don’t want - get rid of anything in your home that you have no use for. You can sell them online or host a yard sale. Then place the money you earn into an account to use as a buffer.
Bring your lunch to work - instead of running to a nearby pizza shop or restaurant for lunch every day, start taking your lunch to work with you. The money you would have used to dine out can be placed in a pot and used for cushion.
Complete your own maintenance and repairs - car and home maintenance and repair jobs can be expensive. Do yourself a favor and cut back on the expense of hiring a professional by learning how to complete basic jobs on your own.
Use coupons whenever you can - coupons are like cold hard cash that can be used to get percentages off of things you need and want every day. Before going out on a shopping trip or even spending time with the family check the internet to see if there are coupons available. You can then take the savings and place it in an account.
Money is tight for a lot of households and budgets help them to maintain financial stability. Be that as it may, when the budget doesn’t leave any room for error, it could lead to more financial trouble for you in the future. It is best instead to create a budget that gives you a little wiggle room just in case you get thrown for a loop. Start looking for ways to find savings in your budget and apply the savings to an account that can be used as a buffer.
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