When you review your spending on a monthly basis, you may notice a trend that negates your efforts to save. Last-minute gifts, celebratory dinners, travel for the holidays and kids' activities are just a few examples of unplanned expenses that can sneak up on you and significantly impact your budget and ability to save.
Things may cost more than you think
Does that spontaneous trip to the beach or fun family outing always end up costing more than expected? Gas, tickets, meals and souvenirs can add up quickly. That science project you bonded with your kids over that needed the expensive glitter or that baseball game you got discounted tickets to but still ended up spending on overpriced snacks — it's these things, these happy little life moments, that are often budget busters.
How to better plan for upcoming expenditures
It's easy to budget for regular expenses like mortgage payments or rent, car payments and insurance. Even those fluctuating bills like electricity can be estimated based on previous statements. It's everything else that is tougher to put into a neat monthly "bucket."
Rather than pulling your hair out trying to place every expense into the exact right category in your budget, try making "life stuff" a part of your financial plan ahead of time. Here's how:
- Get out a blank calendar, datebook or use your phone calendar or planner app.
- Make a list of all the commitments you've already made outside of your everyday routine. Include weddings, vacations, graduations, holidays, etc.
- Go back and write in all the regular stuff that you know will come up: trips to the vet, vehicle registrations, kids' sports fees, etc. You might want to use last year's spending to make sure you don't miss anything. Even if something seems insignificant, include it!
- Assign an estimated dollar amount to everything.
- Add it all up and divide by 12.
- Set that amount aside each month in a separate checking or savings account. The important thing is to keep it where you will not access the funds until they are needed.
By planning ahead, you can enjoy living in the moment while saving for major financial goals like paying off debt, buying a home, building up your savings or taking that dream vacation.