Plug up the leaks in your spending plan- Part 2

Laziness penalties and carelessness fines are two spending habits that impact your budget.

This article by Michigan State University Extension is the second part of a series focusing on spending leaks that youth, or adults, might find in their budgets.

The National Endowment for Financial Education (NEFE) High School Financial Planning Program uses the term “spending leaks” to refer to those unplanned or unhelpful expenses you have that interfere with your successful saving goals.  This article focuses on laziness penalties and carelessness fines.

Laziness Penalties
Planning time, or money, more effectively can help eliminate this spending in your plan. Consider these examples of laziness penalties:

  • Late fees for library books or DVDs
  • A parking ticket
  • Buying sunscreen at the convenience store near the beach because you left yours at home
  • Frequent ATM charges and fees

Carelessness fines
These are a major drain on your spending plan because they are costs that don’t add anything to your life, but do impact your financial status. Consider these examples of carelessness fines:

  • Speeding ticket
  • An overdraft fee on your checking account
  • A spending limit fee on your credit card
  • Fixing the screen of your iPod
  • Buying another set of winter gloves after you lost another pair

The key to resolving spending leaks for laziness penalties or carelessness fines is to do some planning and organizing. Here are some solutions for some of the above examples:

  • Know the policies of your credit cards and checking accounts so you don’t spend more than you have available and acquire more costs.
  • Use a calendar to record when bills, library books or DVDs are due. It might help to put notes on a fridge, mirror or other location you look at regularly as a reminder about important due dates. For bills, it is often best to pay those immediately if the funds are available.
  • Pack a bag of items needed for the next day by making a list, organizing those items in a tote bag or reusable grocery bag, and placing them right next to the door will help prevent forgetting an item and having to duplicate a purchase.
  • Give yourself extra time for parking and getting to locations. Parking meters can be a challenge.  Record the time you parked in your phone or planner. Another option is parking farther away in a flat fee lot and walking to the site. In the end, it might cost less and be a healthier choice.
  • Be careful with technology and everyday items such as gloves, sunglasses, hats, sweatshirts and umbrellas. Think of the items that end up in lost and found boxes. Double check an area before you leave to make sure you have everything you came with. Find a place for items so you know if they are missing with a quick glance.

Knowing areas in your spending plan where you have leaks and then resolving those leaks can help you reach your saving goals faster.

MSU Extension has a great deal of resources to help you create a budget or spending plan which will help you manage your money. Whether an adult or youth, these tools are important to help you stay in control of your cash flow.

More information on money management topics is available by MSU Extension on the 4-H Money Management page and on the MIMoneyHealth website. The NEFE High School Financial Planning Program has additional information and ordering instructions as well.

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