I talk a lot about how having a budget is one the main reasons we are able to successfully pay off debt every single month. The budget allows you to tell your money where to go so that at the end of the month you’re not wondering where it went. We sit down and go through our budget before the start of every month. The budget meeting literally last about 10 minutes. If there are any upcoming expenses for the month we discuss them and work them in by subtracting from other areas that may not really need as much money.
When most people set up a monthly budget they list the normal categories like Rent, Gas for the Cars, Lights, Groceries, etc. Seldom do they think of putting money aside for situations that can completely wreck a well-planned budget. Here are three budget categories your budget may be lacking.
Car Repairs are something we all dread. We know that car repairs can pop up at any time yet we don’t work them into our budget. Marcus and I budget $75 a month for car repairs. There are some months where we don’t spend anything at all in this category so instead of just spending that money frivolously we make a note of what was left for the month and we put that money into our savings account. Since we’ve written it down we know that a portion of our savings is earmarked strictly for car repairs. This month my husbands car inspection was due. After calling the car shop, we were told that the inspection would run us about $60 plus tax. No worries, because again we were already budgeting $75 a month for car repairs and we knew had $160 left over from previous months plus this months allotted $75. After my husband drops his car off he got the devastating phone call that in order for his car to pass inspection he would need $729 in repairs. When my husband called me I could hear the anxiety in his voice. I’d told him we had $160 available for car repairs and he now had to tell me we needed an additional $569 to repair the car. Admittedly my mental state went through a wave of emotions. Shock, Disbelief, Denial, Panic and then calm. I ended up being calm because I knew we had the money and this was not going to wreck or budget because we had an emergency fund and this indeed was an emergency. After calling around to other shops to find out how much they’d charge for the repairs we ended up sticking with the first shop as they were the cheapest. We were also able to find a coupon giving us $50 off.
We ended up using all of the money in our car repair fund ($235), $100 that we’d put aside from last month to buy a weed whacker, and $482 from our emergency fund to pay for the repairs. My emotions would have never made it to a state of calm if we did not have a budget in place to help us keep our money in check.
Many people think that when they adopt an animal the only things they need to provide are food and shelter. Vet Bills like car repair bills can pop up unexpectedly and if you don’t budget for them you’ll be in serious trouble. Outside of food and grooming (depending on what type of pet you have), flea and tick medicines, and annual shots you really don’t need to spend much on your pet. Last year our Bull Terrier Jujubee injured her hind leg. When we took her to the vet we were told that she might need surgery if with strict rest and meds her leg didn’t get better. Of course, like most people we hadn’t budgeted for any of this and being an Animal Scientist I knew this could turn into thousands of dollars. Luckily for us the entire incident only cost us a little over $300 as she got better with the strict rest, but this was an unbudgeted $300.Now we are sure to set aside money for emergencies like this so they won’t catch us off guard again.
Birthdays, Anniversaries, and Holidays fall on the same date every single year yet most find themselves trying to figure out how they can afford to buy gifts and do everything else they need to do with their money in that particular month. Admittedly I don’t participate in certain holidays because I feel that I don’t need a particular day to show someone how much I care, but for the things I do participate in I try to make sure that I plan ahead. One great way to do this is to set up an automatic savings account. This way each month a certain amount is withdrawn from your checking account and put into a savings account. Imagine if you put $25 aside every month starting in January. By December, you will have saved $275! Remember, you don’t always have to spend money to give great gifts. You can give the gift of time and assistance or you can just be there to show someone how much you care. It’s also okay to let people know that you’re on a journey to be debt free so if you won’t be purchasing gifts for a particular holiday. If they love you and are supportive they will understand.