This article may contain affiliate links. I might earn a small commission if you make any purchases through my links and it comes at NO cost to you. For more information, please read my Disclaimer page.
If you ever wondered why your budget does not work and you are not able to save money, chances are, certain expenses are ruining your budget.
You see, creating a budget and updating it regularly is an important aspect of the budgeting process. If you create a budget and do not update it to align with your lifestyle changes, you might as well dump your budget. You’ve got to make sure that your budget is accurate.
So, how do you ensure that?
By updating your budget and expenses at least once every month. If you either forget or underestimate certain expenses, it can throw off your budget.
So, you need to be meticulous about your monthly expenses and avoid any surprises.
Now, let’s look at the 11 expenses ruining your budget.
1) Rent/Mortgage
One of the most common forms of monthly expense is rent and(or) mortgage. Today, renting an apartment or paying a mortgage on a house has become really tough.
Look for options that a little cheaper than what you are looking for. Could you live in an apartment building without a fitness center? If you are fewer people with more sq. ft., maybe consider downsizing?
There are several options to work from especially when it comes to renting and you can really reduce the expense and avoid ruining your budget.
If you bought your house with a higher interest mortgage, that could destroy your budget. Check to refinance so you can reduce your interest rates.
You should always be on the lookout for better rates to refinance your mortgage.
When the interest rates are lower, refinancing is generally at its peak. This leads to competition among mortgage lenders and will result in better options for homeowners.
You can leverage this market demand and supply and get a better refinance rate and save significant $$ monthly.
2) Daycare
Another common form of expenses ruining your budget is the daycare expense. It can be really costly depending on where you live and how many children do you have.
On average a daycare costs around $300/week which is approximately $15,600 annually.
And, that is expensive!
So, what are the options that you can look into to reduce the cost?
Even though you do not want to compromise on the quality of care and the facilities like food, laundry, and other activities offered, you still want to shop around.
Why?
This will give you a good perspective of what it costs in and around your city/town. Also, it helps drive the value conversation from spending additional money.
3) Car Expenses
If you think about the real cost of going from origination to destination in a car, it’s a real stinker!
Often times we think about the monthly car payment we make to either lease/own a car as expenses ruining our budget.
But, it is far more than just your monthly car payment.
You need car insurance to ensure the safety of you and your car against any accidents and damages. Also, just like a human body that needs care on an ongoing basis, regular car maintenance is required.
In addition, the weekly cost of gas (petrol/diesel) is something you cannot avoid.
Download FREE Budget Checklist
>> 50+ List of Budget Items
>> Budget Items categorized into 3 sections: Income, Fixed Expenses, Variable Expenses
One way to reduce these expenses ruining your budget is to shop around at multiple dealerships and negotiate hard on your monthly payments.
Another option is to lease instead of own the vehicle.
A car/truck is a depreciable asset – meaning their value will always reduce after the minute you buy and drive off the dealership.
So, the question is why own the vehicle if you can literally lease (rent) it?
Leasing options have some fantastic perks like lower down payment, maintenance included, and lower monthly payments vs. buying a car.
A smart way to reduce your car expenses every month would be to lease a vehicle vs. buy.
The BEST PART – you still get an option to buy the same car at the end of the leasing term.
Related Article: 10 Budgeting Tips For Your Money
4) Penalties On Late Payments
It goes without saying, the higher your credit card usage, the higher the monthly balances you need to pay off.
If you are tracking your monthly usage and keeping it in line with your budget, kudos to you!
But, if not (and unfortunately, a lot of folks don’t track) you’ve got a problem! This is one of the common expenses ruining your budget.
If the monthly payoff balance is higher than what you can pay, by default you will have to wait until you have enough money to clear the balance.
The credit card company will add interest (penalty) to your purchases (since you did not pay the balance in full) and now the total payoff balance is higher.
And, this becomes a vicious cycle until you pay your credit card balance in full.
Instead, be meticulous about your credit card usage every month and don’t overspend. You’ll both enjoy the benefits and also build your credibility/credit score as time goes by.
5) Maintenance & Repairs
Your air-conditioner can stop working or the furnace can break or the roof can leak without any heads up – sounds familiar?
If you’ve encountered home-related repairs before, you know that these service calls are almost always unplanned (except renovations)
These are random expenses ruining your budget but an essential part of your life.
So, how to avoid these surprises?
The best way is to budget a monthly amount toward maintenance & repairs. If there are months where you do not spend the allocated amount, you will be ahead of your budget. And, there will be months where you end up spending every dollar you planned for toward maintenance & repairs.
6) Gym Membership
A gym membership can be a significant chunk of your budget. Especially, if you visit a popular chain or a gym with all the bells and whistles.
The real return on your investment (ROI) is worth it if you make it to the gym 5-6 days a week. But, if not, gym memberships are expenses ruining your budget.
With technology and the new wave of fitness classes online, you’ll find many options cheaper than a traditional gym membership.
You can substitute your treadmill runs with outdoor runs. Also, you will find ample content from fitness trainers online that you can work within your home. Even a monthly subscription to cycling or yoga classes is cheaper and well worth it vs. a pricey gym membership.
Food
7) Coffee
On average, it costs around $2 – $2.50 for a medium coffee. If you buy coffee from outside every day, that is approximately $14 – $17.5 per week, which is $728 – $910 per year.
Take a moment and revisit that number…
That is a lot of money for coffee. To avoid expenses ruining your budget, reduce the number of times per week you buy coffee from outside. The best way to still enjoy the brand of coffee you like is to buy the ground coffee packs and brew it yourself at home.
It will save you a fortune and you can still enjoy your brew.
Also, coffee giants like Starbucks and Dunkin have their rewards program. Do sign up for those as you can accumulate points on your purchases and redeem for a free coffee/food item and save money.
8) Meals
If you buy daily lunch from outside, on average, that is around $8/day, which is $40 per week and $2,080 per year.
See if you can brown-bag your lunches and eliminate these expenses ruining your budget. The savings from just brown-bagging your lunch could help you pay off your student loans faster or take care of the yearly auto expenses or help you invest in stocks.
The possibilities are endless on how you can use that extra cash and help yourself.
Similarly, reduce the number of times you have dinner outside in a week. You can save that $20 – $40 and put it toward some other budget item or simply save and avoid living paycheck to paycheck.
Related Article: How To Stop Living Paycheck To Paycheck
9) Shopping
Another common form of expenses ruining your budget is the shopping expense.
I’m not saying – do NOT shop!
But, if you shop for stuff that you really need vs. window shopping and buying on impulse, it is going to impact your budget negatively.
Countless folks spend money on clothes, accessories, electronics, games, etc. that they really do not need. Also, there are folks that live with the mindset of – if it’s new in the market, I’ve got to have it!
Well, that mindset is surely not going to help your budget and personal finances.
So, how do you avoid the temptation?
Create a list of items you need and budget for it. Stick to your list and do not indulge in impulsive buying stunts. I can assure you that your budget will thank you for staying the course.
FREE Emergency Fund Tracker!
Life is full of surprises, so why not build an emergency fund that can help you when you need it the most. Learn how to build a $1,000 fund in 77 days.
Entertainment
10) Movie Theaters
Spending on Entertainment can be one of the many forms of expenses ruining your budget.
I understand that you want to enjoy and I am not saying that you should completely eliminate watching movies.
But, with Netflix, Hulu, Amazon Prime Video, Disney+, Apple TV+ and other streaming services available, you can watch those movies at home at a cheaper rate.
And, I’m sure you have subscriptions to most streaming services if not all.
Also, you can avail discounts at movie theaters by signing up for their rewards program and reduce your expenses. A lot of theaters offer some sort of loyalty/rewards program these days.
Once you have enough points in your account, you can redeem for free food/drink items.
Also, you can redeem points toward your future ticket purchase at some theaters.
11) Concert & Games
Concerts and games can be really expensive and could easily turn into expenses ruining your budget.
Again, if you are attending a concert or game infrequently, that’s ok. It’s part of living life and you want to enjoy life as well.
But, if you are one of those who attend concerts every 2-3 weeks irrespective of the cost, you might want to rethink your decision.
The thrill and excitement of watching a live performance are unmatched to any other experience but at what cost?
Games can also get expensive if you calculate the total cost of watching the game at the stadium. From gas & parking to hot dogs and beer, you’re paying close to $150-$200 roughly including the tickets.
What I have found is, unless you are close to the field or a court, most of the time you are relying on the big screens for watching the game.
So, why not watch the game with friends at home or a pub? Turns out to be much cheaper, you entertain yourself and have fun.
So, plan smartly and you’ll be able to save as well as enjoy life.
Download FREE Budget Checklist
>> 50+ List of Budget Items
>> Budget Items categorized into 3 sections: Income, Fixed Expenses, Variable Expenses
Final Thoughts
If you budget the right way, your budget will work for you and help you with your personal finances. But, oftentimes, people are not aware of the right approach to budgeting and hence they give up.
If you can eliminate the above expenses ruining your budget, you’ll be able to make great strides toward your financial freedom. Understanding your spending and tracking your dollars is crucial for your budget to work for you.
Remember, if you can’t measure, you can’t improve!
What are some of the expenses ruining your budget and how do you tackle them? Please share your experiences, thoughts, tips, and ask away any questions in the comment section below!
Thanks for this post, Sam. It reminded me of my “old” financially reckless self. When I had a good job, I’d just spend on coffee and shopping without even thinking about it. I’m a lot more conscientious now but man, I look back now and it makes me want to kick myself lol.
Absolutely Corinne and I’m guilty of the same habits. As long as we learn quickly and make adjustments, should be good ???? Thanks!
Daycare costs are very expensive but finding a quality daycare is absolutely worth the price! Trim your budget elsewhere and invest in your little ones!
Absolutely. There should be no compromise on the quality. Thanks Kari!
Shopping is my problem. Most of the time I really don’t NEED what I buy. I need to think about this more and stop doing it. Thanks for all your ideas
Thanks Kathy! Yeah, shopping is a tough one.
Late fees really are the worst, I hate paying them. I do spend money on movie theater trips or I did until coronavirus. But i saved money every time by having a loyalty card with the theater that earned me discounts.
Thanks Rebecca! Yeah those loyalty cards really help reduce your overall expenses.
I used to be so terrible when it came to shopping, I NEVER set myself a budget and I would NEVER go for what I actually need. I would go just because I liked shopping (insert face palm emoji). Cool post, lots of expenses to re-assess where my money is actually going 🙂
Thanks Krystal! Yes shopping and food seem to be common pitfalls for many (including me :))
Everything is negotiable! People so often believed there expenses are ‘fixed’ but you can always negotiate which is like giving yourself a raise.
Absolutely Evelyn!
I love this post! It really makes me want to make a list of my everyday costs and reevaluate. I bet I could save a lot of money. Late fees sneak up on me sometimes as well as I “don’t feel like” prepping my lunch on some Sundays so then starts the cycle of buying lunch.. Thank you for sharing!
Thanks True! Glad you find it helpful!
I never write a list when I am buying food, and it’s true I always spend more than I had wish to in the beginning… I will follow your advice, thank you for this awesome article.
Thanks Wangui!
Thanks for this post!
It’s always the random car repairs that get my wife and I. It’s never expected and always manages to throw our entire budget out of the window for the month.
Great post!
Thanks Garrett! Yeah those unexpected ones are really annoying especially when you are in line with your budget.
I tend to spend too much money on buying nonsense and now I am kicking myself.
No worries Jimmmy! You can always put a budget and track your money to help you avoid spending on stuff you don’t need.
It’s really that much for kids day care? That’s is my current 9-5 take home pay. Kids are wildly expensive!
Yes, daycare is expensive and something no parent would want to compromise. Thanks!
This was super helpful! Thank you!
Thanks Lauren!
Great tips! Will definitely apply this my budget!
Glad you found it helpful Hallie!
This is a great list to pay attention to examine our finances! Thank you!!
Glad you found it helpful Toniann!
Thank you so much for posting this great information! I think the problem with most of us is not knowing the problem! The majority of people dealing with money issues are not aware of what they’re doing wrong. As for me, I think I’ll need to write down those problems first! I’ve always noticed that I do have a soft spot for sales and deals; I go out to buy one thing, and I came back with things that I don’t even need just because I don’t wanna miss such an opportunity.
Glad you found it helpful. Thanks for sharing!
This a great list. It’s easy to not realize all the unnecessary expenses. Very helpful reminders to stay focused and aware of where your money goes. Thanks for sharing!
Thanks Heather!
I can relate to so many points here.
there are some expenses I should cut down for sure.
thanks for reminding me!
Thanks Hari!
Coffee is my problem, what is worse is I am not a fan of black coffee which is cheaper. I like my iced coffee and lattes which are closer to $5. I am definitely making an effort to buy only a couple times a week.
Thanks Ruby!
This is a really great list! I mention a few of these items on my personal finance blog as huge money wasters as well. Shopping… Gym memberships… there are so many amazing resources out there to take place of these expenses! Thank you for the tips!
Thanks Tegan!
All great points! Being financially responsible is so important!
Thanks Krissy!
Great list! We are a family of 7, so our daycare expenses would be massive. My wife and I have been able to manage our finances on a single income, and she has been able to stay home with our littles. Probably one of the best financial (and life) choices we’ve ever made!
I believe cell phone bills are another expense that ruins the budgets for a lot of folks! So many pay for unlimited data plans, when they likely don’t even need them.
Thanks for sharing Joe!
Sometimes games ruin my budget
Thanks Jimmy! Yeah there are so much such expenses we don’t realize.
I used to waste so much money on food when I was directing high school theatre. I’m pretty much convinced that my stipend for directing paid for our food for eight weeks. I wish I had been better at managing that years ago.
Thanks for sharing Sarah! Well as long as you’ve made changes for the better, that’s all that matters! We all learn by mistakes!
Shopping is probably one of my biggest problems. But fortunately my dad has me invest a portion of my paycheck and put another portion in my IRA. Started doing this at 19 or 20 years old.
Great post Sam!
Thanks Tara for sharing!
A very informative post.
Every thing is negotiable, once you had a defiant goal and budget. Things looks like small payments like coffee are actually cutting our pockets.
Thanks for sharing Sarath!
I need to cut back shopping but I shop mostly for my business now . Trying to pay all bills on time to avoid late fees .
Thanks Keena!
These expenses are definitely some of the most expensive things in anyone’s budget but at least you can adjust them! I moved from a house into an apartment to save almost $200 on rent because I want to buy a house in the future! It sucks that I’m not in a house anymore but I am very happy not to pay as much money! Great article!
Thanks for sharing Heather!