With the economy the way it is many families are finding it useful, even necessary, to write out their monthly budget and expenses. Many times though certain categories are left out or forgotten in the process and the result is that the budget is often over the estimation and the budget is blown. Often times this will leave you feeling let down and maybe even feeling a bit like you failed. When my husband and I started writing out and sticking to our monthly budget we would constantly go over. I cannot begin to tell you how disappointing this was. We always seemed to run into those, “Oh no”, moments. You know the ones I mean, the dog got sick, the check engine light came on or the ever dreaded emergency trip to see the doctor. All of these things were unplanned but should have been. Let me show you the top five things that are often not thought of when planning that budget.
1) When writing a monthly budget include all household expenses from the mortgage, utility bills, car payments, insurance (even if you pay your insurance every three or six months you should break it down into a monthly bill, withdraw that cash in advance and put it away. That way when it comes to paying your insurance you will have the cash available and on hand without feeling like a huge chunk needs to be taken out of your monthly budget), groceries and even automobile gas or diesel.
2) Do not forget the fur babies! During those first few months of budgeting our expenses we would, without a doubt, leave out poor Marley and the two cats. They require food, shelter and vet care and should not be left out of the budget. We took their food and added that into our monthly grocery bill but when it came time for that emergency visit to the vet because Marley cut his foot open we had an, “oh no”, moment. This was not planned for at all and totally blew the budget. Soon we began setting aside $5 to $10 a pay period for vet care for Marley and the cats. If there were another emergency or when it came time for their regular visit the money was there. Of course you will need to put a cap on this. Try and figure the total amount you use for the animals in your home, what are their yearly checkup visits costs? Do you typically have an emergency visit to the vet? Take these costs and break them down into the number of pay periods in a year. When you reach the normal amount spent in a year for your animals then stop contributing to this emergency fund. When this money is used begin the contributions again until you reach the set amount.
3) Oil changes, registration and new tires! You can be sure that as soon as you start rolling on that monthly budget and everything is going great, Murphy is sure to come calling! Go back to last year’s statement and figure in the price of yearly registration on your vehicle(s), cost of regular maintenance, such as oil changes and if you think you will be in need of new tires. Now also add in for that emergency, such as the check engine light coming on, the a/c stops working or you lose a belt driving down the interstate. Figure in all of these costs and again break them down into a year’s worth of pay periods and set aside that amount each pay period. Again, this should have a cap much like your pet care budget. When you reach this cap, stop contributing. After you dip into these funds start the contributions up again.
4) How’s your furnace running? Do not forget those home maintenance expenses. Take an inventory around your house, how old is the water heater, are you going to need to winterize before the snow starts falling? Take these expenses and again break them down the same way as described above into your yearly pay periods. Like above, this should also have a cap.
5) We work hard and maybe we don’t need that new purse or those new shoes but we want them! Don’t forget to pay yourself. When writing out your monthly budget we always remember those that are a must to be paid like the mortgage company or the electric bill. Often times we forget about those quick trips to the vending machine or that double shot we need to wake up in the morning. You and your partner should set aside a certain amount for each other as “blow money”. This is the money that is used on you, not monthly expenses, but once this money is gone you cannot dip into the household finances set aside for monthly expenses. You can spend this blow money as you choose, date night, new shoes or like me hoard it away until you see something that you just have to have.
There are many ways to balance that household budget and get you working towards your financial goals. These are just five of the simplest ways of achieving those goals faster and surviving those, “oh no”, moments.