Financial Management Tip Day 5: Are you missing categories in your spending journal and budget?
If we look at our spending journal in preparation for designing and implementing a budget, it is important to consider the categories of our spending. The hardest categories to include are those that do not show up every single month.
For example some spending that you might have forgotten about:
- Do you pay your insurance monthly or yearly?
- Do you pay your house tax monthly or yearly?
- What about about your water bill?
- Magazine subscriptions?
- Birthday gifts/cards or holidays and celebrations
- Vehicle maintenance, inspection, registration, tire changeover
- Registering children for summer camp or sports teams
- Charity contributions
- Household maintenance
I am a firm believer in the concept of planned spending (budgeted spending).
Any time you fail to plan in advance for spending than you end up short-changing yourself, stressing yourself and your budget out, relying on credit to fill in the gap, or not participating in certain events. So rather include these items in your budget on a weekly and monthly basis.
For example, your daughter wants to play soccer this summer. You need to save $400.00 for registration and new cleats. You get the reminder to register at the beginning of May and you have 4 weeks to find $400.00 -that is $100.00 a week which is a lot to find. What if you had 6 months to save this money? How much would you need to save every month? $67.00 a month or $16.75 a week. These numbers are much more attainable.
What if you decided to go on a family vacation next summer? You know you need money for flights, hotel, food, souvenirs, and outings/activities. You decide you need $5000.00 for this adventure. That means you need to save $417.00 a month or $104.25 a week for the entire year to save up that money.