SHORT SIGHTED: Overlooked items often spell budgeting trouble

Posted By: Matt in Budget on 03/31/2014 at 10:16:36

Anyone who has pieced together a budget always has the best intentions, but those who would consider themselves novices when it comes to financial planning easily can overlook the not so obvious.

You make it a point to tally the bigger ticket items: cars, homes, utilities, credit cards and anything else that comes to you in the form of an email or paper statement.

But what about those incidental expenses, the ones that are fairly consistent with your spending habits but just fail to make the cut when it comes to budgeting.

Maybe you make it a point to buy a coffee three times a week, or decide on a whim that you want to add HBO to your cable package, thinking that it's only a few bucks. What about a stray sweater or pair of shorts that are purchased on a whim· Have you thought about if your budget is fully able to handle anything above and beyond what's written in black and white·

This isn't to suggest that you need to dedicate a line item for every piece of clothing or gift you're going to buy in the next year, but you'd be wise to whip up more generalized categories, and subsequently allot a certain dollar amount to them.

For example, let's say you have about $1,000 left after you've taken a look at your expenses. From there, you want to put aside money for other categories like clothing, entertainment or miscellaneous. The entertainment aspect is one that is equal parts tricky and troublesome for those budgeting, simply because eating at a restaurant, buying a quick sandwich for lunch or those must have summertime concert tickets often aren't factors when you're figuring out how much money you can spend.

As for clothing, those expenses often pop up at a moment's notice, whether you work outside in the cold and need new work boots or if your uniform for your job isn't provided, and you're short on tops or bottoms.

And everyone should have a chunk of change under a category that is absolutely paramount: emergencies. This could include but not be limited to medical expenses, hospital stays or if you're in the midst of changing jobs and have a few months ahead of you without income. This is easily the most missed when it comes to long range financial planning.

Then again, if you leave any of the aforementioned expenses off your budgeting list, you'll continue to scratch your head and wonder why you believe you have expendable income but actually consistently find yourself in the negative every month.

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