Unfortunately, life doesn’t always cooperate with our budgeting strategies. There are always items that get left off the budget, for various reasons, but these items need to be given attention, otherwise they can cause big problems down the line.
For instance, those of us who are self-employed often forget to file quarterly for taxes, when first starting out. Then, tax season rolls around and people can find themselves woefully unprepared to pay a larger than usual payment to the IRS. Then, there are those problems everyone has to face — like a pipe breaking in the house, the car suddenly refusing to start, or the need for new clothing for a personal, social, or business event.
While no list can be comprehensive, because no two lives are the same, following are some items many tend to overlook when budget planning.
This can cover a whole range of items, all of them easily forgotten when working with a monthly budget. Some utilities or taxes are paid on a quarterly basis, rather than annually or monthly. Simply set aside enough money every month to cover the eventual cost — if the bill is quarterly, for instance, divide the expected expenditure by three and set aside that much money each month. If annual, divide by twelve. This method is also perfect for anything you don’t need to spend money on every month.
If you think about it, you’ll realize most of us spend a fairly good deal of money on gifts, even discounting the holiday season. We attend weddings, baby showers, and anniversaries. Kids, spouses, friends, siblings, and parents all have birthdays we need to remember. And don’t forget thank you gifts or apologies or the occasional flower bouquet.
This was mentioned briefly earlier, but it can stand to be mentioned again. If your coffee machine breaks one morning, it would be really nice to have the money on hand to get a new one. Budgeting for home maintenance can take care of that. This is one of those budget items that can tend to build up over the months, but that’s a good thing. Your sudden home emergency may not be a broken blender, but a dead refrigerator. Don’t neglect actual maintenance, either. Eventually, your home fund might have enough money to get that new floor you’ve wanted in your kitchen, or a fresh coat of paint in a room that needs it.
Similar to the home, the car needs car maintenance, too. Most people who budget account for gas, because we have to buy that regularly. But what about oil changes? Or seasonal tire changes? You may need to get new brakes or tires. And of course, your car may stop working for whatever reason. A budget item assigned to the car should account for far more than gas, even if it turns out you rarely use that money. That padding may come in handy if your car suddenly decides to stop working at all.
Planning for spontaneous purchases sort of makes them non-spontaneous, but it has to be done to keep your budget as accurate as possible. It isn’t expensive to grab a cup of coffee on the way to work or have lunch out with a friend or to grab a magazine at the supermarket, but it all adds up. Set aside a budget item for these minor purchases so they don’t sneak up on you in the end.
Subscriptions and memberships
Today, things like gym memberships and cable subscriptions can be taken from our bank accounts automatically, no bill required. While this is extraordinarily convenient, it can also make our money disappear in unexpected ways. Remember each and every such subscription or membership and make sure they are a part of your budget, even (or especially) if you are not actively arranging a payment on a regular basis.
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If you give to a charity, even if it’s a school fundraiser, you need to make sure your budget accounts for it. Annual gifts can be divided into 12 parts, just as with any other annual expense.
Free time is often not free. Even if you just want to spend your time off reading books, you likely have to buy these books. Eating out, getting that special latte, or building the perfect collection all require money, and that money should be in your budget. It doesn’t have to be a lot of money — the important thing is that your budget is not necessarily all business.
The above items are not everything, but they’re a good start for anyone who wants to create a truly comprehensive budget. If you have yet to make a budget, make notes of where your money goes, down to the last dollar. You may be surprised to find where your money is going.
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