One of the best moves I ever made in creating a spending plan I can live with is remembering to include the following items in my monthly budget and annual planning. In addition to keeping three months’ worth of living expenses in my emergency fund, I also contribute money every month to my short term savings account for these kinds of items. Some are just occasional expenses, and some are annual recurring expenses. Here are a few of the more common items people often forget to include in their budgets, along with some ways to start planning ahead.
1. Dining Out/Takeout Food
Of course, you already have groceries in your spending plan. But what about going out to eat? A lot of people don’t account for dining out or takeout food at all—huge mistake. Look at your bank or credit card statement, total up what you usually spend every month, and consider if that’s really where you want that much money to go. If it is and you are meeting other important financial goals, great. If not, consider other ways to socialize with friends or advance preparation of meals at home to save time, like making a big batch of something and freezing part of it.
2. Pick Me Up Spending
These are the small, often daily, expenses that are easy to forget about but can add up quickly over the course of a month. It doesn’t mean that you can never have a special treat again, though. Just be sure to account for it in your spending plan. Instead of every day, maybe make it once or twice a week.
3. Clothing
Think about how much of your wardrobe needs replacing annually. Don’t forget shoes and outerwear. Estimate the total cost and divide that number by twelve. Start setting aside that amount every month into a short-term savings account and let it build up so that it’s there when you need it. It’s also great to have cash in the bank to take advantage of end-of-season or thrift shop bargains.
4. Bills You Pay Once a Year
Another area that causes problems for many people are the payments that are due once or twice a year. It’s easy to forget to include it in your budget until you get the bill. Examples include vehicle registration fees and taxes, annual membership dues and subscriptions, and holiday spending. Again, total up the cost, divide by 12, and put aside some money every month to cover the bill before it comes due and sinks your budget.
5. Gifts
You probably have multiple reasons and people in your life to celebrate with gifts—birthdays, anniversaries, weddings, bridal and baby showers, and the occasional housewarming. Don’t forget the associated costs with weddings—out-of-town travel and wedding party clothing, for example.
6. Pet Care
Even if you already account for food, toys, and annual vet visits, expect the unexpected and put away some money every month for those surprise trips to the vet that can happen out of the blue.
Or even if you run out of cat litter.
7. Personal Grooming
Unless you barter for haircuts and mani/ pedis, make sure to include a line item for these types of costs in your monthly spending plan. It’s important for us as health professionals to maintain a wellgroomed image. There are always going to be some clients who really do look at your toes while lying face-down on the table!
8. Self-Care
It’s hard to take care of others if we’re feeling stressed out. Set aside time and money to do whatever you need to maintain your own physical, emotional, and mental health. Sometimes it’s nice to just receive a massage and focus on you without having to reciprocate.
Solution: The Short Term Savings Account
This is my solution for all those miscellaneous expenses. I stash a certain amount every month into a savings account at the same bank where I have my checking account, so that I can easily and quickly transfer funds as needed.
This way, the money is already there even before I need it, and you’d be surprised how quickly it builds up. Toward the end of year, if I have extra money I know I won’t need, I can add to my emergency fund or other long-term savings goal.
And now and then I treat myself. You can, too.