Before I started budgeting, I was always stressed about paying my bills. The habit of not paying on time caught up with me, and soon the feelings of being overwhelmed. If you need a guide to show you exactly what a budget is? Or even where to start? I made an in-depth guide to budgeting.
- What exactly is a Budget? 3 Part Series
What are all the ways I can budget my money? Alike everything else, even in the task of budgeting, there are alot of techniques. Read about some of them below. I hope you find something that motivates you to get started.
Different ways to Budget
- How to use the 50/30/20 rule in your budget
- How to use the Zero-based budgeting method
- How to start a cash envelope system
When you’re starting to budget for the month, it’s always good to reference what you have already spent in the previous months; there will be a time when you start to see unexpected expenses. The things that were unplanned for or didn’t seem to have a category of its own. Alot of expenses get uncounted in your budget if you didn’t plan them. After the money is spent, now what? I wanted to discuss all the bills that we tend to forget to put in our budget. Don’t worry if some of these might surprise you, but there is always next month. To make it easier, I went ahead and separated them into where to put them in your budget.
First, let’s start with the savings part of our budget. One of my favorite sections because it’s all about the money that I get to keep. After many budgets, I didn’t have an easier time saving. I would start transferring money every month but still had issues arise and had to withdraw. The plan was to create another savings account called an Emergency fund. Reading Dave Ramsey’s finance books put me into creating this first. Little did I know this was more important because life happens. I forgot about adding an Emergency fund to my savings, and I’m sure many people are alike.
An emergency fund is money that you put aside first in cause of an Emergency. The fund is filled first until you reach your desired limit. You can aim for as Dave Ramsey recommends $1,000 for Emergencies. Find an amount that’s large enough to cover and easy to payback. After this is funded, then pick up with your regular savings account.
What qualifies as an Emergency?
- Large medical expense
- Family Emergency
- Important car repair
- Emergency home repair
- Cover expenses in a job loss
Regular unplanned expenses
Unless these bills weren’t automatically taken out of my paycheck every month, I would honestly forget. Some of us don’t have that option, but we need it, so it needs to be paid. As much as it pains me to know I spend about $7,000 a year on insurance, I need it. One time, a medical emergency would arise, and I would regret not having insurance. Just like any other fixed expense, it’s important to add medical insurance to your budget.
It’s a requirement for driving but often forgotten especially when your policy renews. Those who choose half of the year policy can pay for the six months in advance. The tricky part, however, is saving for the next part. Six-month options are always a little lesser in price than the month to month. Car insurance is another fixed expense and must be added to your budget. Make sure you put money aside if you’re only paying twice a year.
Those sneaky little buggers, and yet they come anyways most of the time automatically. Switching to automatic is what got us into the deal but helps us forget because they are oftentimes small. The small amounts are easy to miss coming out. Once you add them all up, now you’re feeling the difference. Take time during your budgeting session to come up with a budgeted amount for subscriptions. You might want to allow yourself to say $100 as an example. Add up all your subscriptions and make sure that you don’t pass that amount. Thinking of signing up for a new one? Then you may want to cut off an existing subscription. The knowledge of your limit keeps you from going over budget.
You have been missing out on the freedom of having sinking funds. It’s like putting small chunks of money aside for random expenses. Just like the Emergency funds have a designated amount, and also a fund needs to be filled. On the contrary, you don’t need to fill this first, but you can transfer small amounts every paycheck. Most of the sinking funds I’m going to list might sound familiar. There are a few that happens once a year or many times.
We love our pets, but it does cost to keep up with their wellbeing. Pet supplies include food, grooming supplies, and medicine. Don’t forget about the upkeep of something as regular as waste removal. You’re either scooping the poop or picking it and bagging it. You can always look for savings for pet supplies by signing up for Pet Store subscriptions or looking for coupons. Put aside a reasonable about based on what you spend on average every month. The amount would really fluctuate alot unless you had medical expenses for your pet.
Insurances don’t exactly cover everything all the time, so it’s best to be prepared. Putting money away for medical expenses is important for those times. You can also add in prescriptions or times when you get sick and buy a boatload of supplies. I would generally place this into variable because the amount can be unpredictable and unplanned. You can get ahead of things by having a sum of money to make things easier.
Gifts happen on birthdays, events, and holidays. It’s easy to get surprised for this when you forget that one of these is approaching you, and then it’s a rush to grab something. When you are in a rush to do anything, you will spend more and waste more energy. Make a note of all the birthdays on your calendar and create a budget for the holidays. My tip for events is to have a set amount to spend, and that should be for every gift. Make a limit and stay within budget. Adding money for gifts can help you not to overspend in your budget for the month.
There is always going to be a point when you have to buy clothes, especially if you have children. I would like to say what you will endure, but it doesn’t happen that way. Clothes get worn out just as much as your children grow out of them. When the seasons change where I have all four of them, my clothes do as well. So I would have to invest in the weather, I should say, and be prepared.
Even if you don’t need to buy clothes sometimes, it’s just good to get something that makes you feel good. A new outfit can add to anyone’s confidence. Plus, it’s a gift to yourself. As far as kids go, you will be lucky to keep up with the trends. Clothing trends and the personality of a teenager go hand and hand. They might even describe it as their identity. Kind of dramatic, but that’s the point, lol. Remember all the fashion trends you’ve gone through as a teenager. The best lesson here is to always put a little something aside for clothes.
Time for a break of fun! Family time doing activities or catching a movie date with your partner. What is the point of saving all this money if you can’t enjoy it? Experiences are the things we remember, and we should aim to create more. A little goes a long way; save something small every month. You don’t have to make having to fun an expense all the time. Find some activities you can do for free. When you want to go out after a period of no spending, you will have more funds.
The Allowance section is more free-spending in set limits. At many times you might have spent on entertainment or hair/nails and could be taken out of your Allowance. I love having an Allowance because it puts the fun back in budgeting. You don’t have to plan on what you’re spending; you just do what you want. The main thing is to make the limit realistic against other things in your budget. Don’t overdo it but always strive to stay under budget. Just knowing it’s there is freedom enough. When you want to grab yourself something more expensive, you can afford it from all the sacrifices.
Hair/ Nails/ Beauty Supplies
Beauty supplies are my kryptonite! I admit that I’m addicted to all things that make me into a girly girl. Let’s see; we got hair supplies, cosmetics, nails, and everything that smells good! Walking into an Ulta store is like opening the golden gates. That’s why I try my best to avoid it, lol. I can also admit that there are times when you feel like you need it. A new hair cut, a manicure, it’s just right to treat yourself. It is definitely ok to put this in your budget. If you plan it and can afford it? Go for it! Try putting aside 5 to 10 every paycheck until you feel like making your day.
Irregular home expenses happen all the time, even something as small as changing the water filter. Repairs and maintenance are the keys to the longevity of your home. I would place the similarities along with having a car but not as frequent. Things break, doorknobs need replacing, areas need upgrades. The amount to set aside depends on your home’s size and if you’re an owner or renter. Putting $20 always every pay cycle is a good start and can increase throughout the year. It’s not when but more like if so…I’m prepared.
The check engine light is on, and now you have to figure out what is exactly wrong with your car? Over the years, I’ve learned alot about cars, which only came from moments like above. Generally, when I had to get something fixed, it’s coming out of my paycheck. By keeping a car Maintenance budget category, you can put aside money for fixing your car. Even better, you can have money for regular oil changes, brakes, and tune ups to omit bigger expenses down the road.
For someone like me that loves Christmas, I can get overjoyed in my spending. The holidays can easily break your budget as you feel like you need to get more, another, and another. Saving on the holiday season is planning, seeing what already owns, and lastly, having a budget. If you want to save money this year, come up with a budget and put the money aside as early as you can. The best thing you can do about coming up with a budget is comparing what you spent last year and creating a list.
License Renewals/ Car Registration
This type of expense doesn’t happen every month, so it’s easy to forget it. It’s not like you take out your registration papers out every year and notice when the date expires. Unless you have this date set somewhere as a reminder, you will get a letter in the mail regardless. Mostly it’s telling you there are 30 days left to re-register your vehicle. It’s generally around the same price depending on the state and expires in a few years. License renewals also depends on your state but can happen every one to two years. For registration, the amount is calculated based on the type of car you drive and can be pretty pricey. Set aside 10 dollars at least every month for this fund, and you always be prepared.
Is it necessary to have sinking funds? It does make it easier, but if you want to budget these expenses into your monthly budget, that’s fine. Try putting them into your variable expenses categories since they always seem to change in amount. Come up with a realistic amount for each one and stay within limits. The good thing is if you’re under budget, you can save it for next month. As long as you keep up with the frequency and remember when they occur, you will be in a good place.
Now that you have an idea of what you can add to your budget, evaluate next month. Have fun with this, and see if you can come up with some amounts for each one. The breakdown: you budget more and reflect on how you felt after these additions.