We all intend to do the right thing with our money but sometimes our decisions and actions harm, rather than benefit, our financial situation. Typically this happens when you are in a hurry, or have not thought it through or not tailored a financial action to your specific situation. Here are some common situations where the end result may not be what you wanted, if you don’t take the trouble to do it right.
A budget too tight
You decide to streamline income and expenses to increase savings. But you overdo things and create a budget that may be designed to fail. The typical errors are to overlook tracking the expenses for a few months, so that you don’t know where you spend and don’t know your level of expense for each category of expense. Without this information, you could fail to allocate adequate resources for your expenses. These errors can derail your budget. A very tight budget, to save more, could prove to be unsustainable so that you may not be able to live with it. This would cause your budget to collapse, leading to your savings targets not being met.
