Don't forget! (to put these things in your budget)
One of the first things I ask people to do when they begin working with me is to document all of their expenses - what they spend money on, how much, how often, that sort of thing. What day is the car payment deducted, how much do you really spend on groceries, how much do you spend on the holidays?
Oof. That last one is a doozy, isn’t it? At least with the groceries, you can look back over the last few months and come up with a number, but then there’s things like the holidays that are a little more...vague.
Or there’s the things you know are “coming up” but never quite remember when, or how much they’ll be. Annual car registration, Amazon Prime membership, credit card annual fees, that safe deposit box you got and never remember to use. Oh and the online backup for your computer, and automatic photo storage from your phone, and the twice-annual-car-insurance. And your quarterly taxes. Ohhhhh no, quarterly taxes!
Before you run off, screaming or crying, let’s break it down.
Here are the most common things that people I work with forget to include when they’re making a budget or just trying to manage their money differently:
1) The Infrequent
Car registration/excise taxes
Quarterly income taxes (if you've got a freelance gig, side hustle, or business and you make around $3K/year or more, you have to pay quarterly taxes).
Car, life, business, disability insurances (if not paid monthly)
Vacations (travel expenses, food, activities, clothes and accessories)
Dues and subscriptions (website hosting and domains, cloud backups, PO boxes, software subscriptions
Licenses and memberships (Amazon Prime, professional dues, dog and chicken licenses*)
Landscaping (spring or fall cleanups, snow removal)
Gifts (holidays, birthdays, anniversaries)
Holiday spending (on everything other than gifts - think: food, special events, decorations, travel, special outfits)
2) The Overlooked
Clothing and clothing care (laundry, repairs, dry cleaning)
Entertainment (Netflix, Hulu, Spotify, Audible, iTunes, concerts, video games)
Hair and skin care
Fitness & sports
Giving and donations
3) The Unexpected
Emergency vet visits
Travel for family emergencies
Best friend is getting married! Yay! (Now you just need a plane ticket, a hotel, a bridesmaid’s dress, shoes, makeup, hair, a gift, a bridal shower, a bachelorette party…)
4) The Low Priorities (that probably shouldn't be)
What do you do if you see some things on this list that you’ve forgotten to plan for?
In a nutshell - make a reasonable estimate, plan for it now (if it’s an annual expense due in 6 months, for instance, break the expense down into 6 chunks and put money aside monthly), and move on with your life. Don’t beat yourself up for it! For things in “The Unexpected”, my rule of thumb is while you may not know when you’ll need money in those categories or how much you’ll need, it’s reasonable to assume you will eventually. Something is better than nothing.
What do you think, is there something on here that made you think twice? Anything I’m missing? Tell me in the comments!
*Yes, folks, this one is ripped from the headlines of my own life!