Keeping a successful budget is difficult, probably why two-thirds of American’s fail at it. In order to have an efficient budget, you will need to budget for monthly expenses, including utilities, mortgage, car payments, and food and gas, but beware of a few items that can ruin a budget quickly if you are not careful.
Auto Upkeep & Repair
If you have a new lease, you probably not need to worry as oil changes are now only needed once a year and everything is covered under warranty, but for the rest, once something goes, the rest seem to follow. So, when it comes to normal upkeep such as brakes and shocks as the car gets older, major engine repairs can always happen, so it may be good to have extra reserves in an emergency fund.
Unexpected Appliance Expense
Much like auto repair, same goes for appliances when you never know when the dish washer could break down, or worse, the air conditioner or furnace. While you should be doing normal upkeep such as changing the air filter every three months, sometimes you could catch an unlucky break and something will break down and a pricy service call will need to be made, unless you have a handy family member that can assist.
After Work/School Activities
While a gym membership should already be built into a budget if it’s already part of a normal monthly expense, sometimes we forgot to build in any sports we play, whether it is us or our children. I play hockey so every few months when the next season dues are up, I have finally learned to have that available instead of putting it on a card or dipping into savings.
Let’s face it, our pets are a member of the family (my wife says she would refinance the house to take cash-out if it meant saving our dog), so if an unexpected trip to the vet happens and you need the money to pay, the emergency fund would be a good place to take from, without affecting the budget or dipping into a savings account. We have to take care of our furry children.
We know who we buy for when it comes to birthday and holidays, so let’s build those extra expenses into our budget, so when it comes time to go Christmas shopping, it doesn’t set us back a few months. Weddings are a little more difficult to judge, but fortunately invitations are sent so much in advance that you can adjust the monthly budget leading up to, so there will be available cash to give as a gift.
Health Insurance Co-Pay’s & Deductibles
Going to the doctor is bad enough when you are already not feeling your normal self, that when you tack on medical bills, it can delay your recovery time due to the extra stress. Try building your health insurance premium deductible into the budget, so that say it is $500, when the bills start to come in, you can pay and move on. Co-pays will still have to be paid for office visits and medication.
You could be moving along successfully over the course of the year with your household budget, when you decide to take advantage of a last-minute deal on airfare and a cruise (can you tell I am speaking from experience) and your whole budget is shot. Vacations do not have to be cancelled when sticking to a budget, but last-minute trips should be avoided so you have ample time to save up for it, without hurting what you have worked so hard at.
Changes in Utility Expenses
Unless you live in a warm-weather state that does not change much of the year, you could easily figure out how much to budget for monthly utilities, but here in Michigan, where the weather in the winter could be 60 degrees one day and 30 the next, it can be a little trickier. Try and account for the gas bill being higher in the winter and lower in the summer, while the electric bill to be higher in the summer and lower in the winter.
Probably one of the main reasons why a budget can fail, eating out is the easiest to do and the hardest on the wallet. The food markup is so high that what you spend at dinner is probably enough to cover meals for a week by going to the grocery store. Try and limit eating out one weekend night instead of all the time.