When budgeting, essentials are the first thing everyone writes down, which is good, but not the end of the matter. If you find that your budget is still failing you, it is probably because you miss adding the incidentals or unexpected expenses that just seem to crop up every month. Taking these into account will make a big difference for your budget. Below are four frequently forgotten items that you must add into your budget right now.
1. Annual payments
It is easy to remember monthly payments. In fact, you just have to copy them from last month’s budget. However, things you only pay once or twice a year are often overlooked. Once you receive the bill, your budget is gone!
Property taxes or car registration are good examples. Plan for these items by adding the total you paid last year and dividing it by 12. Set aside this amount each month so you can cover your upcoming bill when it is due.
Of course, nobody could tell that you would need to see the dentist this month or that your car would break down. It does not matter because the bill remains the same. Problem is these bills add up quickly and they are not always small expenses. Protect yourself by setting up a sinking fund so you can cover unexpected expenses. You can also use your emergency fund if you built one.
The occasional birthday gift can be simple enough to handle, but it makes sense to have a separate budget category for presents, especially when you are talking about big holidays like Christmas. Anything related to shopping is always risky for your budget and it is best to come prepared.
4. Pick-me-up spending
This is for the little things you buy to lift your spirits. It can be a cup of coffee, a slice of cheesecake, or one book you pick up every time you walk by the cute bookstore. You do not usually budget for these because they are small purchases but try adding them up and you will notice a substantial amount! No wonder there is a gaping hole in your budget every month.