How is it that we always seem to come in over budget? Sometimes it feels like no matter how much you plan you just can get it right. This might be because you are forgetting about all of those little unexpected living expenses that people usually overlook. What you need to do is start expecting those unexpected.
It is amazing, but so many people forget to add any kind of budget for recreation when they are doing financial planning. People often overlook this category because they are trying to live frugally or think that they can do without the luxuries of recreation. But, let me cue you into a little secret. Everyone ends up spending money on something fun!
You might not have a lot of extra money floating around but we really recommend that you consider adding in a modest budget for recreation. This means including things like movies, fun activities, or even weekend vacations. You don’t need to spend a lot of money on these things. However, when you have already anticipated the cost it will feel less overwhelming when you are invited on a fun day out with friends.
People often forget about the money spent buying gifts. Of course you might not need to buy a gift every month. But when you do need to get something for someone you want to make sure that you have expected that expense. We usually remember to save a little money around the holidays and remember that we need money for those gifts. However, many people forget about the gift money needed for birthdays, baby showers, or weddings.
We suggest that you add a little bit of money to your monthly budget for gifts. If you don’t use it one month then you can save the money or use it on something else. It is just nice to know that when your best friend’s birthday rolls around you won’t be late on rent trying to give them even a modest gift.
I remember working with a life coach when I was younger and she asked me to add in a modest amount each month for parking tickets. I remember being shocked and wondering how many tickets she anticipated that I would get. Of course she was right and when my first parking ticket rolled around I was grateful that I had the money to pay it.
Especially if you live in a city where it is easy to rack up tickets it is crucial to set aside some money to pay them. The same goes for moving violations like speeding tickets. Depending on where you live these tickets can range anywhere from $40-$250. We all like to think that we are great drivings and immune to tickets. But the truth is that they happen every once in a while. So why not be prepared?
4. Accidents/ Miscellaneous
This one is a bit of a catch all category but it is one that people often forget about. Here I am not talking about accidents that mean you have to pay hospital bills. I am really talking about breaking something around the house, the car needing a new air filter, your favorite shoes finally giving out and things like that.
It is incredibly helpful to expect that these expenses will pop up. It might be something small every month and something bigger down the road but these things do happen. When you plan your budget add in a little padding for accidents.
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