What to Include in Your Family Budget
Knowing what, where, and how much you are spending and saving your money is important when you are preparing your family budget. When I work with clients, one of the first things we address is understanding all current expenses. This includes any unusual items as well as small recurring expenses.
Because we all live complex lives, our expenses are also complex. This means when preparing a family budget, most people forget all sorts of expenses. This article will help jog your memory when you are working on your family budget.
Start first with what you do know
Before digging into too deep, it’s best first to include all the expenses that you normally pay during the month. If you are the person in the household that pays the bills, it is likely you can quickly write down or type typical expenses.
Next consider your lifestyle
If you are married with young children, your expense will be different then a single person with several pets. Your lifestyle such as whether you have hobbies, pets, or commute to work will mean that your expenses will be different than another family’s.
I have broken down the article by major categories to help you figure out items that are usually forgotten when preparing your family budget.
Do you have any pets?
Some pets are more costly than others, but every pet’s expenses should be included in your budget. You may, for example, choose to buy only organic food or some pet owners cook special food for their animals.
Just like human, there are visits to the veterinarian including vaccinations and perhaps medications. You may have pet health insurance or are paying off an expensive health-related bill. Don’t forget about dog walkers, sitters, or using a kennel when you are at work or out-of-town. In some cases, you may be considering buying an animal or adding fish to your fish tank.
What are your hobbies?
Most enjoy watching movies or TV as their favorite pastime activity. Others have hobbies that may need a little extra cash to others that are quite expensive. Your hobby purchasing iTunes music or making art sculptures from recycled scraps still costs some money. Make sure you include all of your family members’ hobbies in your family budget.
Does your home need minor improvements?
Minor things like getting better lighting by buying a few lamps. You may need to replace your old couch. You may want to redecorate your den. Maybe you are considering painting several rooms in your home.
Do you live in a warm or cold climate?
Warm climates may mean you have to pay for pest control year-round. Along with more lawn care maintenance then if you lived in a different climate. Cold climates have other challenges such as keeping wild animals from making your home, their home.
Gifts and celebrations
It’s no wonder most overspending occurs during the holidays. Most families forget to save not only for the holidays, but for gifts, in general. If you have children, it is likely you need to buy gifts for the birthday parties they are invited to join.
There are yearly celebrations such as Mother’s Day and Father’s Day, that no one seems to include in their family budget. And don’t forget about your own family birthday celebrations and wedding anniversary. You may be throwing your own party for spouse or child.
Automobile maintenance and repairs
Even if you have a leased car and most maintenance is covered, you should still include a monthly amount towards these expenses. If you don’t use the money, then you will have money to put as a down-payment for your next car.
Kids activities and more
Families that require a babysitter do not forget to include it in their family budget. However, they typically forget about after-school activities, traveling athletic teams, and camps during the summer. There also maybe be lessons paid to professionals, such as music teacher teaching your child how to play the guitar. Also, tutoring can sometimes be a surprise expense.
Applying and preparing for college can be a big strain on a tight family budget. Tests (PSAT, SAT, ACT, and for graduate school, GMAT) are all required for admission and have associated fees. You may need to hire a tutor to help your student to prepare for these tests. In addition, each school has an application fees and there are fees to send your transcript.
Here are few miscellaneous expenses:
- Security system for your home.
- Dry Cleaning
- Monthly fee for Office 365
- Other technology fees, such as iTunes and online storage
- Haircuts, include haircoloring and special cuts
It’s important to include all of your expenses in your family budget. The best way to ensure you don’t forget is to think about your spending habits throughout the entire year. Consider what types of expenses that have occurred in the past and what may happen in the next year. One thing to consider, we all think the unusual ones are a rare occasion. What I have found, however, is that frequently another unusual expense arises during the year.
What expenses has tripped up in the past? Did you make adjustments in spending the following month/year to make up the difference?