Having an effective budget in place is critical to keeping your finances on track and your money where you want it.
However, sometimes when we are setting up our budget there is a tendency to leave out expenses you don’t think of right away. Failing to budget for all of your expenses can throw you off, ruin your budget, and leave you with a feeling of failure.
Budgets tend to fail for two reasons: they are either not planned well enough or they are not being used. If you are doing everything in your power to put your budget to work and it is still failing every month, then your problem lies in the planning process.
In order to remember all the expenses you have and need to include in your budget, it’s important to look ahead and map out any and all of these often overlooked expenses. This is how you will guarantee your budget will be safe from overspending and keep you from having to reach for your emergency savings to make it through the month.
The best way to figure out all of your expenses, within reason, of course, is to look back at your entire prior year of spending to figure out where you have been overspending the most. While this may seem like a ridiculously long amount of time and spending to be analyzing, it will give you the most comprehensive idea of your spending.
Looking back this far will help you remember the odd expenses that only happen once per year and ensure you are including everything to the best of your knowledge. After all, we cannot plan for everything which is why it is so important to have an emergency fund.
Once you have a good idea of your future expenses you need to set them up budget-style for at least the next 2-3 months to guarantee you plan and allocate your money to cover these expenses well in
To help you save some time and give you an idea of some of the expenses you may be forgetting to budget for, I have put together a list of 10 expenses you are not budgeting for but should be! If you are interested in finding out what these often forgotten budget categories include, please keep reading!
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10 Expenses you are not budgeting for but should be
The very first expense you should be putting money aside for each month is for your savings. You need to
You need to be setting aside money strictly for your savings or you will never actually save money. Trust me, I’ve tried and failed miserably.
Budgeting for your savings is more important than most other expenses in your budget. It’s more important than shopping, Netflix, and going out.
Your savings is your security, future, and key to staying out of debt.
Here are common savings categories you can allocate this amount to:
- Emergency fund
- Financial goals (vacation or down payment on a house)
- Sinking funds for gifts and holidays
- Large purchases like a laptop, phone, or even a car
In order to maximize your savings and guarantee you will actually save money every month, set up an automatic transfer through your bank or have a portion of each paycheck deposited into a savings account through your employer’s payroll department.
2. Quarterly & Annual bills
It’s so easy to miss one of these bills because they are not on a regular monthly schedule. In order to make sure you always have the money to cover them you need to set aside a portion of the payment amount each month.
To determine the amount to budget for with quarterly and annual bills, track these expenses for the prior year, total them, divide by 12 and
Then, each month set aside the monthly amount you calculated that is needed to cover that expense when it comes around.
Some quarterly and annual expenses to keep an eye out for can include:
- Utility bills like water
- Property taxes
- Self-employment taxes if you work for yourself
3. Subscriptions & memberships
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Here are some ideas of subscription and membership expenses that often get overlooked in budgeting:
- Beauty boxes
- Food service memberships like Thrive Market
4. Special occasions, Holidays, & Gifts
Luckily, these kinds of expenses happen (usually) at the same time every year so it’s easy to include them in your budget. The key is to actually remember to budget for them!
The easiest way to save up for these recurring expenses is to use a sinking fund. If you are unfamiliar with sinking funds
For example, after Christmas, I look over what I spent during the holiday season and start saving all year to cover that amount of expense for the following Christmas. By saving up for it this way I only have to set aside a small amount each month instead of spending my entire paycheck and dipping into my non-holiday savings later in the year. I also guarantee that I won’t have to reach for my credit card to cover expenses because the cash is already availabe.
Create a sinking fund for each occasion you can think of so you can cover the costs of gifts, dinners, or parties.
Ideas for these expenses and sinking funds to create include:
- Other special occasions you celebrate often
When living on a budget, one of the most important things you need to budget for is fun. You absolutely need to treat yourself every once in a while and by budgeting for it, you can relieve some of the guilt and remorse you are used to feeling after splurging on something not included in your budget. Budgeting for fun is absolutely necessary to keep up your spirits while on a financial journey.
Not budgeting for fun can make your budget feel very suffocating and will cause you to eventually go on a spending spree to make up for it. Instead, when you do include fun money in your budget, grabbing your favorite Starbucks drink will feel amazing instead of making you feel guilty. Trust me, coffee tastes
Fun money in your budget is money you can spend on whatever you want. You will be amazed at how easy it will be to live on a budget when you are preparing for these expenses.
Fun money can be spent on anything you want, but if you need some ideas here you go:
- Fancy coffe
- Lunch at work
- Literally anything you enjoy and that you can afford
6. Going out with Friends
Just like budgeting for fun is important, so is budgeting for going out with friends. This will help you enjoy life on a budget by being able to go out and spend money that you have already set aside for this specific purpose.
This category can include the following expenses and any other that fits with your lifestyle, no rules here – except that this amount is within reason when it comes to your budget:
- Eating out at your fav restaurant
If you are a big shopper or just love getting new clothes and shoes in general, then it is also important to allow yourself a stipend each month to shop.
You can either use up your budgeted amount each month – OR – use it to save up for more expensive items that will not fit in your monthly budget like high-end coats, boots, and bags. I am all about saving money on stuff, but I believe in quality over quantity, especially when it comes to clothes and footwear.
You absolutely need to be including the cost of your daily travels, whether it be gas,
You also need to budget for you vacation travel expenses like a flight, hotel, food and entertainment. It may seem silly to be budgeting for vacations but you should strive to pay for vacations in cash to avoid debt.
The best way to budget for a vacation? Plan your vacation out, come up with a reasonable cost for all the expenses, set a date for when you would like to go on this vacation. Once you have all this figured out you can divide the total costs by the number of months before you will need the money to start booking then you start setting aside that amount each month.
It is a strategy guaranteed to ensure you can completely avoid credit cards when planning your vacations.
You absolutely cannot forget to budget for your pet’s expenses! Their cost of living is just as important as yours.
Here are some pet expenses that can be budgeted for to make it easier:
- Annual Checkups
- Other pampering & spoiling – these expenses tend to be impulse purchases so its best to stay on the safe side and make sure you set aside an amount in your budget.
10. Home & Car maintenance
Last and certainly not least are home and car maintenace expenses.
While these expenses may not occur on a regular schedule, you still need to be budgeting for them every month in case something major happens down the road.
The best way to budget for them is to set aside an amount or percentage of money each month and keep it in a separate savings account just for these expenses. This would be an emergency fund but literally just for home & car expenses.
It is incredibly important to budget for every expense in our lives. If we do not, our budgets will not be as effective as we need them to be in order to reach financial success and achieve our financial goals.
To recap, here is the list of 10 Expenses you are not budgeting for but should be.
- Quarterly & Annual Bills
- Subscriptions & Memberships
- Special occasions, Holidays, & Gifts
- Going out With Friends
- Home & Car Maintenance
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