Four Budget Essentials

June 27, 2018

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A budget is essential to attaining and maintaining a work-optional lifestyle. Hidden expenditures can potentially snowball into unwanted debt. In this post we list out four hidden expenses you may have forgotten to add to your budget!

Car Tags

Car tags come around every year, but they can easily be forgotten since the notice usually arrives about two months before you have to pay them. If you haven’t been budgeting along the way and you have more then one vehicle, it can quickly turn into a $250-dollar hidden expenditure. The easy way to budget for your tags is to take what you paid last year, if you haven’t gotten a new vehicle, and divide it by 12 when you get your monthly budget. If you're a few months in until your tags show up, take that same amount and divide it by how many months are left until you have to pay. We call this a sinking fund.

Annual Veterinary Bills

If you have pets or are thinking of getting a pet, be sure to account for your yearly visits and vaccinations. These expenses can quickly put a dent in your finances so budgeting these items are must! If you have a new puppy or kitten, we also recommend you double the amount you would budget as they usually require more frequent vaccinations in the first year.

Birthday Gifts

Just like car tags and veterinary bills birthdays can sneak up on us as well. Be sure to add those birthdays into your budget, and if you have younger kids, it’s also a great idea to add an extra birthday gift or two to the budget. As they grow up, kids regularly make new friends, and they will most likely get invited to a birthday party or two!

Emergency Fund

The emergency fund encompasses all of those out of the blue issues that seem to happen at all once. We call it Murphy Insurance, as in Murphy’s law, everything that can go wrong will go wrong, and of course, it happens all at once - appliance failures, vehicle issues, medical bills. Our cash management process takes these emergencies into account, and we recommend that everyone has a basic $1000 emergency fund available. Beyond that, you should budget to build 3-6 months of expenses set aside for a fully funded emergency fund.

Final Thoughts

A budget is an essential piece to your financial future. If you don’t have a budget or need a template for one, check out the Budget Resources Page on our website and download one today!

Click HERE for budget templates.

Listen to our Four Hidden Budget Items Podcast