Most of us think we are pretty good at estimating our monthly expenses. We account for all the bills that come in every month like cable, water and heat, car insurance and loan payments. We even remember to include such things as groceries, gasoline, and other miscellaneous expenditures.
But our monthly expenses actually add up to a lot more than we typically account for.
The only way to determine with any degree of certainty what your true expenses are, is to keep a running count of every penny you spend for a few consecutive months, and then work out your average from there. We have many more Budgeting Help Articles Now Available.
This may seem a bit ridiculous or silly, to actually write down your expense every time you put a dollar into a parking meter, or stop into a local café for a cup to go or the current copy of GQ, but these are very real daily expenditures which add up hugely at the end of the year, and which most of us overlook completely.
Other, more significant expenses that don’t typically get mention are things like getting a hair cut every six weeks, or passing through the car wash once a week.
How much is your house really costing you?
Sure, you are factoring in your mortgage, because that is a monthly expense, but what about the insurance and taxes which you only pay once a year? Are you remembering to include the random purchases like a new DVD player? Have you purchased any new home décor items recently, like trendy candles or new tea towels?
Clothing is another category that is often completely underestimated. If you keep track of every purchase for a few months, or a year, you will find your clothing costs to be much higher than you might have guessed. Every pair of socks, every belt, every scarf, pair of gloves, accessories…or a new coat, these are not paying for themselves.
When was your last car tune-up? Did it include tire rotation and a new air filter? How about your Christmas budget… is that reflected anywhere? How much do you spend on birthday presents for friends and family members?
We often do not account for emergencies or set aside a fund for unforeseen expenses like a spontaneous weekend getaway, or minor car repairs. Regular dental or optometrist visits often fail to make the budget list, too, but they are a very significant and very real cost.
When you really sit down and think about everything that you spend money on, no matter how small or large the amount, the budget suddenly takes on a whole new shape. If you have a consistent monthly income, you can structure a realistic budget based on all of your actual expenses, and work out a plan for allowing for all the little unforeseen expenditures that can really break the bank if left unaccounted for. We have many more Budgeting Help Articles Now Available.