Living to a budget is one of the cornerstones of personal finance and, when used consistently, can be the key to a strong financial future. However, there are a few budget areas that often fall by the wayside and don’t receive the attention – or the planning effort and funding – they require. Here are three of these often-neglected budget areas, so you can double-down your own focus and ensure you have a budget that covers every area exactly as required.
Food and drinks away from home
It’s easy to under-allocate your resources on food and drink purchased away from home, such as takeout coffees or cafe meals, as it’s rare that you’ll know exactly what you will spend on any purchase before it’s actually made. It’s therefore advisable to overestimate in this area when setting your budget for the month, and any surplus can be a pleasant surprise that you divert to your savings instead.
Household and car repairs
Many people find it tough to convince themselves to set funds aside for repairs for problems that haven’t even occurred yet, but doing so is crucial for long-term budget management that allows you to manage unexpected and unpredictable costs. Try to save towards these repairs every single month; even if budget constraints mean you can’t set aside a large amount, you’ll still appreciate having a go-to fund when repairs do become necessary.
Budgets can often be seen as very “of the moment”, working on a month-to-month basis and focusing on the short term of your financial situation. However, a good budget will also incorporate a focus on the future too, and particularly your retirement finances. If you’re not currently saving for retirement, examine options such as IRAs as discussed in the infographic below, and then make contributions a standard part of your budget. If you are already saving as part of your budget, run a calculation and check that the amount you are saving is sufficient to meet your retirement goals – and if not, consider making small increases where you can.
Infographic Design By Accuplan Benefits Services