If you have financial goals, creating a budget is a great way to help you accomplish them. Unfortunately, commonly forgotten expenses can derail even the most carefully crafted budget plan. It’s common to focus on daily expenses and forget those that are less frequent. Therefore, crafting a comprehensive budget can help account for these unexpected costs.
So, to ensure you don’t break the bank on overlooked cost, here are some of the most commonly forgotten expenses that you should include in your annual budget.
OUT-OF-POCKET MEDICAL COSTS
Even though your health insurance may cover most of your healthcare costs, you still need to be aware of expenses such as copays and coinsurance costs and plan for catastrophic costs associated with injuries or an unexpected illness.
Take some time to review your health insurance coverage and estimate your financial obligations throughout the year. This will help you plan accordingly.
Try to avoid a surprise tax bill from Uncle Sam. If your filing status has changed, or you’re self-employed, you should review your withholdings and set aside some income in case you think you may have to pay a hefty tax bill at the end of the year.
Don’t forget about your furry friend’s annual vet visits, food costs, grooming trips, medications, and boarding expenses. For example, set a reminder on your phone the month before your pet has their annual check-up so you can include it in your monthly money plan.
CELEBRATIONS AND GIFTS
Take a look at your budget and plan for celebration and gift-giving costs. While many budgeters may plan for big holidays like Valentine’s Day or Thanksgiving, they may overlook other birthday or graduation celebrations. Creating an annual budget can help you plan for these types of costs.
HOME EXPENSES AND FEES
From hiring a plumber to fixing a broken toilet or buying paint to fix a scratch on your wall, there are plenty of extra expenses that come with owning a home. Home maintenance expenses and fees often come as a surprise to many homeowners. Therefore, it’s important to factor costs such as landscaping services, replacing furniture, and other household items in your overall budget.
VEHICLE MAINTENANCE COSTS
While you may have budgeted for gas and quarterly oil changes, you may have forgotten about other maintenance costs that come with owning a car. For example, registration fees can cost over $100 per year. Additionally, you need to account for insurance costs, especially if you only pay your premium every quarter or every six months.
If you have a need for speed or live in a big city where parking is hard to come by, you may also want to budget for parking and speeding tickets.
FINANCIAL FEES AND SERVICES CHANGES
From bank charges to out-of-network ATM fees, it’s crucial to consider the cost of managing your money. If you receive professional financial guidance, you should also consider budgeting in fees for filing your taxes, or managing your retirement accounts. It’s common for these fees to go unnoticed, and they can add up over time if you’re not paying attention.
While it’s important to try and anticipate all of your expenses, it can be a draining task. Therefore, you may want to contribute to a miscellaneous fund to cover some of these forgotten expenses. Start by budgeting $100 every month for your random needs. So, whether you want to splurge on a massage or need to hire a plumber to fix a leaky pipe, you won’t have to worry about not having the funds to cover the cost.