Planning my budget takes time and thought, but it’s worth it because it helps me stay on top of my financial goals. An important component of maintaining a careful budget is making sure that all of my expenditures are accounted for, such as these 10 things that you should include in your budget.
Insurance Premiums Make Sure You Are Covered
Paying insurance premiums can sometimes feel like you’re throwing money away, but an opportunity to draw on your insurance policy will probably come up sooner or later. When that happens, you’ll be glad that you’ve been keeping up with your premiums. Make sure that you budget for health, auto and homeowner’s or renter’s insurance. You may also want to add other policies, such as life or disability insurance.
Planning for Medical Expenses Takes Care of What Your Insurance Doesn’t
Although keeping up with your health insurance premiums will ensure that you are covered if you have a large medical bill, it’s likely that you’ll also have smaller medical needs to pay for now and then. This can include the cost of prescriptions, co-pays, and over-the-counter medications, and you should factor those expenses into your budget. You should also set aside the deductible amount on your health insurance plan; if you have a high-deductible plan, this figure might need to be in the $1000s.
- Home Upkeep Maintains Your Property
Fixing small issues with your house as they arise can help keep them from becoming larger problems. If you have money in the budget to cover those small maintenance needs, you’re more likely to make sure that they get done. And, no matter how careful you are, there will still probably be times when you will need to draw on your home upkeep fund to pay for a large repair. That’s why experts recommend setting aside 1 percent of your home’s purchase price each year to cover home maintenance and repairs.
Car Maintenance Helps You Stay on the Road
Just like a home, a car also needs regular maintenance. The oil must be changed several times a year, the tires need to be rotated now and then and, eventually, the belts and other working components must be replaced. A general rule of thumb is that you should set aside about $75 per vehicle for maintenance and repair costs.
An Entertainment Category Gives You Space to Play
Budgeting your money helps you make responsible choices with it, so you may feel like you shouldn’t allocate any funds to seemingly frivolous expenses like entertainment. However, if you don’t allow yourself some funds for fun activities, you may quickly feel stifled by your budget. Build entertainment into your budget so you can catch a movie or go out for coffee with friends now and then without feeling guilty.
Personal Care Keeps You Looking Good
Whether you are a clotheshorse or don’t care much about how you look, you still have to put some time, effort and money into your personal care and that of your family members. In addition to purchasing new clothes now and then, there are the costs of getting haircuts, buying toiletries, outfitting your family with shoes, and more. Whether you break these costs down into separate lines of your budget or lump them all together as “personal care” is up to you, but you must make sure that these expenses are accounted for.
Pet Expenses Take Care of Your Furry Friends’ Needs
Taking care of a pet can cost over $500 every year. In fact, in the first year that you bring a new pet into your home, you should expect to spend over $1,000 on that animal’s care. Plan for these costs by factoring pet care into your budget. This category can cover food, toys, medication, vet bills and more.
A Gift Fund Is Handy for Holidays and Birthdays
Over 20 percent of Americans pay for their holiday shopping with credit cards, and not all of them will pay those cards off right away. Instead of relying on credit to get you through the holiday season, set aside money in your budget for gifts all year long. This fund can also help with birthday, wedding or graduation gifts.
Charitable Donations Feel Good
Giving money to worthy causes just plain feels good. Pick one or more causes or organizations that are important to you, and include donations to them as a regular part of your budget. On average, American families donate 4 to 6 percent of their income to non-profit groups.
An Emergency Fund Prepares for the Future
Are you prepared to cover any large expenses that suddenly arise? If you have an emergency fund, you will be. From major repairs to medical bills, you never know what life will hit you with. With a stocked emergency fund, you can cover those expenses without relying on credit cards or consumer loans. If you continue to build up your fund, you’ll also be prepared for a period of unemployment.
Did you come across any new categories to add to your budget? I make sure that all of these items are covered in my budget. Leave suggestions for other categories in the comments, and please share this article with your friends.