If you have ever created a budget, you know that you want to assign a budget category to every expense so that your budget works. But, have you ever hit the end of the month with a fully balanced budget, but you still don't have enough money left at the end of the month for everything?
It's likely that you forgot to include everything in your budget. It's easy to do (especially when you're first setting up your budget) since there are various expenses that are easy to forget about, such as these 11 expenses:
If you have kids, you know what I mean. It seems like they need $65 for this sport, $35 for a uniform, $30 for this activity and so on. Even if you're not certain what activities your kids are going to participate in, be sure to budget a monthly amount in your sinking funds so you're ready when the money is needed. You can always adjust your budget later if you are way off. We also budget an amount monthly for summer camp, so we're not struggling to find the cash when it's time to register.
Holidays and Birthdays
You shouldn't be shocked by birthdays and the holidays since they happen every year, but unless you make an effort to build savings for gifts and any special expenses related to birthdays or the holidays, you may be struggling to find enough cash to pay for them.
If you want to go on even a small vacation without busting the bank, be sure to add vacation as a line item to your budget. I calculate how much we typically spend in a year, divide by 12, and save that amount monthly.
Junk Food/Daily Incidentals
You may have your food budget under control, but do you frequently make stops at the convenience store or the vending machine? Are you frequently asked to contribute money towards a group project (like co-workers birthdays)? You might not realize how much your expenses add up over time, and it may cause you to go over budget.
You may have fixed expenses (like your premium) that are easy to account for, but don't forget to budget for the extras like dental work for cavities, new glasses, copays or deductibles. You can use your Flexible Spending Account or Health Savings Account to pay for these expenses, but be ready in case you don't have enough saved in those accounts.
Even though it might be easy to budget for your pet's monthly food expenses, don't forget about those irregular expenses like vet visits, shots, etc.
Are you surprised every year when you receive your car registration bill and then scramble to find enough money to pay it? Be sure to add up the total amount due per year and then divide by 12 to work it into your monthly budget.
Are you a member at Costco or Sam's Club? Or perhaps you have a AAA membership or quarterly HOA dues? Write down a list of every annual membership that you have to pay. Then, add them all up, divide by 12 and save monthly for those expenses.
Homeowners or Renters Insurance
Unless your homeowners insurance is included in your mortgage payment as part of your escrow, you likely only pay it once per year. Rather than have it be a surprise expense once per year, be sure to divide the annual expense by 12 and save that amount monthly so you have the money ready when you need to pay your bill.
Auto Maintenance and Repairs
It's a fact of life that your car will likely need some repairs at some point in your life. At the very least, you need to pay for maintenance such as oil changes, transmission and radiator flushes, new tires, etc. Be sure to budget an amount monthly at the very least for car maintenance so you're ready when you need it.
If you own your own home, you need to set aside a fund to pay for future home repairs and maintenance. I'm not talking about fun home improvement costs (like new hardwood flooring), but money for when the furnace needs to be repaired or for when you need to repair your roof. There are two rules of thumb when saving for home repairs – 1% of the value of your home per year or $1 per square foot per year. Regardless of which one you choose, be prepared to pay for this expense. Also account for irregular home expenses like pest control, yard maintenance, etc.
What about you? What expenses tend to take you by surprise and blow your budget?