It never seems to fail. You budget your finances at the beginning of the month and you include all the essentials. You have your mortgage payments, your utilities, and your groceries. Yet somehow every month you come up short. The problem is that you are forgetting to budget items that aren’t as obvious as your rent. Here are a few budgeting blind spots.
You are blessed with friends and family, but part of that gift is the obligation of actually spending time with them. That costs money in drinks, dinners and the occasional gift. Since these expenses might appear to be small and rare, it is easy to forget to include these costs while budgeting. However, these costs can add up. When you budget, estimate how many times a month you are going to go out and how much each of those trips costs and adjust accordingly. It can make a huge difference in terms of estimating how much you spend.
Expenses You Want to Forget
Maybe you are on a diet, but every so often you sneak off for a piece of pizza or binge on some ice cream. Maybe you are trying to quit smoking, but you sneak a few packs a month. But when you are budgeting at the beginning of the month, you do not want to admit that you are going to slip and spend money on these items so you don’t include it. Budgeting is about honesty with yourself, so be sure to include some funds for when you slip.
Budget for the Unexpected
You can’t predict that your car is going to break down or that you are going to get sick. If you could, you would take preventive measures and the things would not happen in the first place. These surprise expenses also make budgeting hard. The best thing you can do is set aside a set percentage of your income every month as a “rainy day” fund and let it accumulate. You won’t face these types of unexpected expenses every month, but a rainy day fund will allow you to pay them off regardless of how big these costs might be.
Identity Theft Protection
Identity theft protection is an expense you should have, and if you don’t already, you should start incurring it. Identity theft is a major national problem and can have a bigger detrimental effect on your budgeting than any of the other issues listed above. Do your research and find an identity theft protection service that can ensure a thief will not run up major expenses on your credit. It is a small short term expense that can save in the long run. Lifelock is now offering 10 percent off and a 30-day free trial so you can check out the service before committing.