The thing about budgets is that you have to stick to them, which is hard enough. What’s even harder to witness is being outside your budget despite adhering to all the elements that you had on your list. Seriously, what is going on? The most probable thing is that you are spending your money on things outside your list. And I don’t mean splurging on the newest Nike drop or that wrist watch you’ve been eyeing (ok, that is a possibility). I am referring to everyday things that are a part of our reality that we simply forget to add to the budget list. Here are 5 things that people forget to add to their budgets and might account for some of the missing funds at the end of the month.
- Gifts for Birthdays/Anniversaries/ Special Occasions
Events like birthdays and anniversaries have a habit of coming around every year, whether you are financially prepared for them or not. Then there are the other reasons to celebrate, like weddings, baby showers, promotions at work, etc. that can become costly affairs. By adding this as an item in your budget, you can put away money regularly into a gift fund from which you can draw as the occasions arise without disturbing the rest of your expenses. This will be especially handy at Christmas, when a great portion of the population goes into debt, mostly due to excessive gifting.
- Mortgage Insurance
People know what mortgages are, and have become accustomed to budgeting for their mortgage payments. But what about your mortgage Insurance? If you are required to pay mortgage insurance, it will be included in your total monthly payment, but many don’t realize that it is a separate cost. Though lenders automatically tack on their own mortgage insurances, those in the know shop around for a better deal. By adding it to your budget as a separate point, it will motivate you to make sure that you are getting the best rate out there for you, not just what came “automatically”.
- Home Supplies
There’s nothing sexy about buying toilet paper or laundry detergent, but these are real expenses that can add up over the course of the month. This is probably the explanation for why every once in a while your grocery bill seems to be 140% of what it usually is. That extra 40% accounts for detergents, sponges, fabric softeners, paper towel, dish soap and whatever else you use to do daily maintenance and cleaning around the house. Add this to your budget breakdown to have a clearer and truer understanding of where your money is going.
- Loan Payments
Chances are you have a mortgage, a line of credit, or a credit card. Actually, most of us have all three! However, we should not become comfortable with “being in the red” as it makes us fiscally vulnerable. Make payment plans for all of your loans and add the payment amounts to your budget. This is something that should be not just included in your monthly budget but actually play a major part in its construction.
- Emergency Expenses
This is an essential part of your budget that a lot of people like to just avoid completely. That mindset is dangerous. An emergency fund is where you get the money to pay for fixing the washing machine, replacing the broken phone, or contributing to the funeral costs of a member of the family. There is an infinite number of scenarios which involve dipping into your savings in order to survive. Otherwise, you would probably be forced tocompletely shake up your budget or credit the expense, which means you would have to increase the loan payment portion of your budget anyway…