You have the perfect budget.
Every month, you stick with it, day in and day out.
You never go over on your budget and you always have enough money for every category. Right?
What? Your budget isn’t perfect? You wish it were easier?
Welcome back to reality! Let me pull my head out of the clouds and continue…
Budgets aren’t easy (though some may say budgets are sexy). They’re not always easy to create and they sure aren’t easy to stick with.
It takes discipline and persistence. And consistency. And…well, it seems hard, doesn’t it?
That’s because it is…or at least, it can be. Sometimes it feels like there are holes in your budget. Unexplained black holes that suck your money in or areas that you just don’t think about.
Here are 5 areas your budget may be missing…
1. Home/Auto Maintenance
If you’re renting your home, you usually won’t have to worry about home maintenance, but if you’re buying, you must budget for this. Leaks, breaks, cracks, explosions (hopefully not so much) and water damages happen and sometimes insurance won’t cover it.
Be practical and realistic. If you have lived in your home for a while, you can look back to get an idea of what you have spent in the past and budget accordingly.
Since you have an emergency fund (right??) for big accidents, you shouldn’t have to worry about budgeting for things like that, but make sure you have enough saved up for the other, smaller and more frequent unknowns. It’s better to save an extra amount every month for home maintenance than to use your emergency fund.
Auto maintenance is a must. You probably include auto maintenance in your budget, but do you include everything? Consider some of the costs associated with your vehicle that you may not think about when budgeting (and don’t forget about the state-specific costs, like inspections).
Are these items in your budget?
- Oil changes
- Tag renewal
- Driver’s license renewal
If you’re a magnet for traffic tickets, you may want to budget for that too. This may sound silly, but be honest, if you get speeding tickets like it’s a hobby, you may as well put it into your budget.
Budget a small amount each month for all of these things so you have the money when you need it.
What? You don’t have time to take vacations? You can’t afford to take vacations?
I’m not buying it. You can afford to take them and make time for them, but you have to take time and money away from something else.
Unless you’re in an extremely difficult financial situation, you can probably afford to budget an extra $30, $40 or $50 every month for a future vacation.
Just figure out how much money you need in advance, then figure out when you want to take it. That way you can plan your monthly amount and figure out if it’s a realistic goal.
If that’s realistic, then go for it! If it’s not realistic, then change your course of action by either finding a way to earn the extra $50 per month or saving less than $50 per month and waiting longer.
You may already give and if you do, I commend you. Giving is one of the most necessary aspects of your budget, because in a lot of ways, it’s the foundation.
Don’t immediately associate the word “give” with “tithe”.
It’s so common, especially in the United States, for people to instantly think of giving as your tithe to the church. This leaves people who don’t attend church feeling like they’re “off the hook”, but the truth is this:
You give to help others, but you also give to help yourself. If you don’t think of giving as “win – win”, then you’re doing it wrong.
By all means, tithe if you attend church, but if you choose not to attend church, there are still countless ways to give and you should be doing it.
Giving doesn’t stop there. Don’t forget holidays, birthdays, house-warming parties, weddings and all of the other situations that you find yourself in needing a gift to give. You have to budget for this type of giving as well. It’s a common black hole.
4. Unexpected Non-Emergencies
This is a big budget-breaker.
How often do we find ourselves in a situation where we need to spend money, sometimes a substantial amount of money, but we haven’t planned for it in the slightest.
You may think: “We have an emergency fund, but is this really an emergency?”
You probably know what I am talking about, but let me give you some examples:
- The television goes out
- The microwave stops…microwaving
- Your computer is outdated and you need to upgrade
- Your printer stops working (like printers ever really work)
- You decide to take up a new hobby
In most cases, none of these are emergencies, but they’re all fairly “big ticket” items and the money has to come from somewhere.
So what do you do?
Haven’t you been reading any of this? You budget for it!
Decide on an amount of money to “max out” your “non-emergency fund”. There is no reason to keep adding to this fund indefinitely, but consider an amount ($500, $1000, etc.) and once you have this amount, stop contributing.
You can keep this wherever you would like. If you tend to have several non-emergencies like this every year, then you may want this money to be easily accessible in a checking account, but if these are rare circumstances for you, you may just want to put it in a savings or money market account.
It works well to just keep this money as a “buffer” in your checking account. So once you fund this category to say $500, that means that you don’t let your checking account go below $500 unless you use that money for an “unexpected non-emergency”.
By the way, this is really for after you’re debt-free. If you’re paying off debt, these things can wait.
5. Your Children’s Education
This one is debatable. Are you obligated to help your children pay for college?
Absolutely not! It’s entirely up to you.
I personally budget an amount every month to go into a college fund for each of my children. It’s not necessary, but it’s nice and they’ll appreciate it.
There are scholarships, grants and all kinds of other help for school. You can choose to be part of the help or not. Either way, I believe your children will be fine, but if you want to and have the means of doing so, then saving for your child’s education can set them up for even more success.
There are several ways to save for college. You can even use an IRA to save for school, but the point is, decide if you want to help with school and get to it.
Budgets only work if you stay on top of them and trim them to fit your life. I’ve never had the exact same budget for very long. It will always change when things in your life change. Change with it and stick to it.
Want to perfect your budget? Check out our list of the best budgeting tools.