When creating a budget for your family, most people will start by either revisiting a previous budget they put together or by making a list of all their bills to figure out where money needs to be distributed.
Budgets that are created based solely on the past and those prior bills and the hopeful amount you want to spend on groceries, is doomed to fail!
Having a budget that works for you will not only help keep you accountable for the money you spend but ensure you don’t overspend.
If you have told your money exactly where it should be going, then you know what every single penny you make should be spent on.
There are a few common categories that most people tend to forget to put in their budget, which as the year progresses suprises them and leads to overspending and unexpected expenses.
I spoke about this topic on my Savings Segment on Fox. Watch the replay video here:
Believe it or not, birthdays are actually the most common line item missing from a regular budget.
Whether it’s your birthday or someone else’s, chances are you will be dishing out some amount of cash for birthdays.
The funny thing with my families budget is that we think “Birthdays are recurring every year” and therefore it would automatically end up in our budget. But every single birthday I seem to be unprepared for the expense! And we have six in our immediate family so six times a year I am faced with this issue?!
Even if you make all of your gifts from scratch, you still need money for the materials. To save money, party supplies are one of the things I ONLY buy at the Dollar Store.
Take a look at your prior spending to help you determine what is considered “normal” for birthday spending in your household and use this as your baseline budget.
But remember, it’s not just birthdays, if you are anything like my family, then I’ll bet you also spend money on anniversaries, weddings, baby showers, etc. With a big family, it feels like there is at least one extra expense every single month!
Unless you don’t buy a single article of clothing during the entire year, you should have something for this expense in your budget.
This could be as small as $10 a month, or more significant if you buy a lot of clothes (or have growing boys, like I do).
Even if you are trying to get out of debt, you should still set aside money for this expense every month.
Shoes get holes in them, pants don’t fit, and some other possible scenarios in which you will unexpectedly need new clothes. Set aside enough to cover those emergent clothing situations… obviously not keeping up with the trends.
This is one category that we use for our cash envelopes, and it can be tempting to take money out of that envelope when it carries over from one month to the next. Be diligent not to pull the money out so that you have it available in case a large clothing/shoe expense pops up later.
By leaving clothing costs out of your budget, you could throw your whole budget out of whack in any of these scenarios.
Makeup & Hair Care
Along the same lines as the Clothing is specialty makeup or haircare items.
Not the free shampoo/conditioner you get using coupons, I’m talking about the professional highlights for your hair, or a trip to Ulta to try the anti-aging moisturizer your Sister-In-Law swears by (and looks younger than when you last saw her).
Heck, just walking iintoUlta, I know I’m going to spend over $100.
So if we do our due diligence and break that cost down, it amounts to budgeting $8.50 per month… if you spend more than that for the entire year, then you need to include more in your monthly budget!
Contrary to what you might believe (because I always thought this was true), budgeting does not mean you can’t spend money on those seemingly luxury items, such as highlights or specialty makeup, it’s just managing your money to know that you’ve identified how much you are going to spend beforehand, and stuck to it in the heat of the moment when you spent the money. It’s making sure you spend in the moment, what you decided you wanted to spend when you were levelheaded.
Since this item is only paid once a year (or every other year), we tend to forget about it and not include it in our budget.
Then once a year a little letter in the mail shows up in our mailbox kindly reminding us that we didn’t put anything away. Fantastic.
Depending on what type of car you own, you could be dishing out a few hundred dollars for just your registration. This doesn’t even take into account the cost of your inspection either if your state requires it.
Don’t get caught off guard this coming year, set aside $7 a month (that’ll give you $80 at the end of a year) and have that money ready when the renewal bill comes!
You could also consider including the oil change or regular maintenance for your car in this section because that is an expense that doesn’t usually happen all that regular. For example, I don’t set up a quarterly trip to the mechanic to replace my fluids and rotate my tires. But when my light goes on that I’m going to need a new oil filter and I realize it’s time for the next 10,000-mile maintenance again, which costs around $200, and there goes my budget!
Irregular Household Maintenance
Do you have a water softener on your house? How about a filter on the water for the refrigerator, or ice cubes? Did you remember to replace the Air Conditioner Filters this month?
These expenses always catch me off guard and then throw off our budget.
I’ll receive a call that it’s time to replace the Reverse Osmosis filter at the kitchen sink… and $150 later, I’m so frustrated that we are gonna overspend A-GAIN this month!
You could also consider including the oil change or regular maintenance for your car in this section because that is a regular expense that doesn’t usually happen all that regular. For example, I don’t set up a quarterly trip to the mechanic to replace my fluids and rotate my tires. But when my light goes on that I’m going to need a new oil filter and I realize it’s time for the next 10,000-mile maintenance again, it costs around $200, and there goes my budget!
Think about those irregular things you replace in your home that cost around $100 or more (12 A/C Filters at $10 each is $120 total). Those are the things that need to go in your budget so they don’t force you to overspend.
Doctor Visits And Prescriptions
Most people budget for their monthly healthcare coverage (or it comes right out of your paycheck), but then they forget about the occasional doctor visits that throw a wrench in the budget.
Even if you are perfectly healthy, you will likely visit the doctor at least once a year for an annual exam or sickness you can’t shake. Or you might need to eventually grab a pack of vitamins from the store.
If you don’t think any of these apply to you, then let me paint another scenario for you.
You have no money set aside for a doctor’s visit, and you come down with pneumonia. Not only will you need a trip to the doctor’s, but you will also need to pay for the prescription antibiotic to make yourself better!
Medicine isn’t cheap, so if you don’t have any money stashed away, this could bust your budget quick.
As a quick number, plan for the cost of one to two co-pays for each person in your family. We used to pay $40 per co-pay, so for my family of six that would amount to $480 each year ($40 x 6 people = $240 x 2 times = $480). Divide that by 12 months in a year and include it in your monthly budget. In my example, I’d need to include $40 each month in my budget for doctor’s visits. Don’t forget to also include a dollar amount for the prescriptions as well as any other medicine you take.
I take Zyrtec almost daily, a bottle of 30 liquid gels costs over $20 for that one medication alone! What about Advil? Or Midol? Yes, I absorb some of them in my grocery budget when I buy them using coupons. But an extra $20 can still bust your budget!
What if a flu-like sickness passes through your house? Extra tissues, soup, and over-the-counter meds you didn’t already have in your stockpile can really set you back around $50 – $100. And that can easily derail a budget.
Be prepared by thinking about it now. Then, if you have a super healthy year, you can celebrate the budget victory by using the money to get something special for the family! Score!
Taking your family on a fun outing, going to a Mom’s Night Out with your friends, or even a special date night should be a part of your monthly budget.
I’m a true believer that even if you are on an extremely tight budget, you should always have something in this category to keep you from overspending.
I know it sounds counterproductive to spend money in order to avoid overspending… but after over-evaluating my own spending habits, I’ve found that we are much more likely to stay on budget each month, if we plan for spending a little bit on fun things.
It might not be a super extravagant outing (like going to the movie theatre that cost an arm & a leg) but planning even a little purposeful fun time each month (such as the drive-in instead) and the cost associated with it, will help you feel sane during tight times.
We never seem to forget to put grocery money in our budget, after all, we need to eat to survive, but eating out never seems to get a line.
Usually, eating out tends to be thrown into the grocery category or not budgeted for at all.
If you (or your husband) eats out at all, you need to create a separate line in your budget for this expense. I would not lump this in with the family “Restaurant Budget” either. This is truly a separate expense that needs to be identified if you want to see where you are specifically spending money to you have control over your finances.
Lunches your husband eats at work and spontaneous trips to the drive-thru after school (or Co-Op class) count too!
This will ensure that you always have enough money for groceries, even if you only eat out once or twice.
Make sure to be realistic with your eating out budget. If you are used to eating out multiple times each week, you can’t expect to quit cold turkey and start bringing a brown bag lunch. Make sure you include this line item until you can wean yourself off the cost.
Save yourself from overspending by including this line item so you have an accurate picture of your finances.
Creating a budget can be difficult, and it may feel like you always forget something. If an expense creeps up on you that you forgot, try hard to make a note of it so you aren’t caught off guard in the future.
Your Turn: Comment below with what item you have been forgetting to add to your budget.
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