One reason why budgeting isn’t effective for some people is because it is not thorough enough. When your budget falls apart while you’re building it because you find extra expenses, fret not! It can be discouraging for sure, but it can help you understand more about your financial commitments and help you be better prepared in the future. Here are a few things to consider adding to your budget if you haven’t already:
- Tires: If you own a car, it’s really good to incorporate the cost of tires in your monthly budget. Inevitably, the day will come when they will need to be replaced. It won’t be a traumatic experience if you set aside a bit of money every month, instead of having to fork over a large lump sum all at once.
- Vehicle Registration: If the amount of money you have to pay for your registration causes a strain on your pocket, you can break it up into smaller chunks. For example, let’s say the registration for your car is $100 this year. If that’s too much for you at once, you can set aside $20 per month for 5 months. Then when it’s time to pay it, you’ll be ready!
- Holidays: This is often a very easy place to blow the budget. During the holiday season there are many extra expenses to consider. Gifts, travel, extra food for guests, changes in utilities, etc. If you plan to set aside money specifically for this time of year it’ll be much less stressful.
- Insurance deductible: What is a deductible? Simply put, if you need to use the insurance, the deductible is amount that you’re responsible to pay out-of-pocket before the insurance kicks in. For example, if you were to be in a car accident and there was $1,000 worth of damage. If your deductible is $500, you’ll need to have that money available because the insurance won’t kick in until after that. So if you don’t have that money available you could really be stuck between a rock and a hard place. If you want to read more about that, you can peruse the Investopedia website here.
- If you have children, it’s important to consider that summer time can lead to extra expenses. For some families, childcare will be a concern for older children. When I was younger, my parents put my brother and I in a daycamp program during the summers so we weren’t home alone. I enjoyed it and my parents took comfort in knowing that I was staying out of trouble!
These are just a few things I have noticed cause problems for people because they didn’t plan in advance. I made a simple excel sheet to help you get organized with your expenses. You can click the button below to have it sent to your email box.
What kinds of things blow your budget? Comment or Tweet me to let me know!
1 thought on “Financial Literacy Month: 5 Things You Need to Have in Your Budget”
Pingback: 4 Things you can do to bounce back from a Comparison Hangover - Feel Good Finances