I’ve talked about starting a budget before, but few budgets are ironclad, especially from day one. Usually, when you’re first starting a budget, you need to take time to tweak the exact amount you’re spending on certain expenses as well as add in any expenses you may have left out. If you have a zero-based budget, you may need even MORE tweaking. Either way, there is usually something missing from your budget when you first make it.
Fortunately for you, I’ve been there before. I had little guidance, created a budget on my own, and fixed it as I went. So, I put together a list of 10 things you’ll want to make sure you put on your budget before you consider it finished. If one of these doesn’t apply to you – great, but most will. Without further ado, let’s get into the list of 10 items you may have missing from your current budget.
1. Gifts, Or Even Entertaining Friends And Family
People generally forget to budget in gifts. Now, this isn’t always a monthly expense, so it may just be something you’ll have to consider seasonally. However, you could always have a single budget category for gifts as well as entertaining guests (like friends and family). After all, having people over can often cost a bit, if only in regards to food. Regardless of whether these expenses are monthly, I’d definitely consider setting aside at least some money for them every now and then. If you don’t, it can rapidly add up before you realize how much you spent on it.
2. House & Car Maintenance
Obviously, your house and car can have issues, break, get damaged, or any other of a multitude of things that end up being a significant expense for you. Now, hopefully you have good insurance policies and a solid home warranty that can take care of huge issues. However, there are still expenses that can pop up that aren’t crippling but still a recipe for a ruined day. To an extent that is what an emergency fund is for, however, some of this can be included in your budget to a degree.
For example, any routine maintenance like oil changes should not be forgotten when you’re drafting a budget. For larger things, like a home renovation, be sure you include some sort of savings for that in your budget too.
The point is, whatever your house and car requirements are, make sure you include what you can foresee into your budget. Insurance and warranties don’t cover everything, and it’s always better to be prepared than have to take it from your emergency fund.
3. Medicine And Medical Bills
This is overlooked all the time in budgets. Include your routine copays, deductibles, and medication in your budget. You clearly can’t budget for a medical condition you’re not aware of yet, but you can include expenses in your budget for your routine examinations and procedures – anything you KNOW you’ll have to pay at some point in the near(ish) future.
For example, include allergy medication in your budget if you have seasonal allergies. Also, if you plan on having a baby, start saving up or budgeting for the bills that will come from that! For most people, medicine and routine visits shouldn’t be a huge part of your budget, but it’s still important to include it.
4. A New Wardrobe
I hate to say it, but clothes get worn and torn and you eventually have to replace them, even if you’re a minimalist. A common way to handle clothing is to include it as part of your monthly budget, but I’ve also seen a lot of people budget it in over the course of a few months instead of a permanent or year-round thing. Whatever tactic you prefer is fine, it’s entirely about what makes the most sense for you, but don’t forget to keep it in mind and budget it in somewhere, at some point.
5. Vacations
I really wish that I didn’t have to mention this, but vacations are one of the most common large expenses that people leave out of their budget. I understanding wanting spontaneous vacations, and a lot of people love that. I suggest setting aside a certain amount of money each month toward a fund specifically for your next vacation. If you do that, you shouldn’t have an issue if you want to take a quick spontaneous vacation – you’ll already have the money for it. Alternatively, if you like planning, this lets you prepare for big vacations over a longer period of time.
The point is this, even if you don’t plan on taking a vacation, most people end up deciding to take one (even if it is only for an extended weekend). So, make sure you start saving up money for a vacation, even if you don’t have plans for one set in stone.
6. Reimbursing Your Emergency Fund
I don’t care if your emergency fund is already at the amount you want, I still recommend setting aside (a small) part of your budget for reimbursing it. I recommend this for a multitude of reasons:
- It covers – at least partially – unexpected expenses and emergencies. Having something like $100 that is scheduled to be added to your emergency fund can act as an additional buffer if something happens like a car breaking down.
- In addition to softening the blow when you face an emergency, it makes sure you’re already back on track to replenishing your emergency fund.
It doesn’t have to be a lot, but setting aside a little for it is a good idea. If you end up going well past your emergency fund target amount, you can always temporarily take it out of your budget. Of course, you still may want that portion of the budget for emergency fund reimbursements later, so I recommend putting it towards additional investments instead of falling into the trap of lifestyle creep.
7. Insurance – Medical, Life, & Auto
I get it. Insurance isn’t fun to think about, and sometimes it’s deducted from your paycheck automatically, so you don’t even really see the expense. Still, it’s important to include your premiums in your budget. For tips on insurance, like getting the best premiums, check out my definitive guide.
8. Miscellaneous Irregular Expenses
If there are any other expenses you have, which aren’t monthly, remember to include them in your budget and start saving up a fund specifically for them. For example, if you have some sort of subscription or service you pay for annually, split the total into 12 equal parts and include it in your monthly budget. Also, if you plan on any major purchase in the near future, work it into your budget and start saving for it now so it isn’t a huge blow to your emergency fund later.
9. Extra Debt Payments
Most people include the minimums in their budget, but I encourage you to add a little more than the minimum. After all, the less debt you have the freer you are. This applies especially to any sort of high-interest debt like credit cards. Debt with low interest-rates, like a mortgage, may not need additional payments.
10. Investments
Include your investments in your budget! Sometimes starting with how much you want to invest first (before anything else in the budget) can help you narrow down your other expenses so you focus on what you really want or what brings you closer to your goals. Either way, be sure to save as much as your reasonably can, and be sure to invest consistently over a long period of time.
Conclusion
Creating a budget from scratch can be a bit difficult, and it’s easy to forget certain things. Add these items to your budget, if they’re not already in it, and be sure to add expenses to your budget as you encounter them in your everyday life. Over time you’ll eventually have a pretty ironclad budget. If you think I forgot something, or want to share what you tend to forget when you’re budgeting, leave a comment below!
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