8 Budget Expenses You’ll Probably Forget to Plan For

by Kevin on February 17, 2011

Planning your financial life with a budget is one of the best things you can do to get on the right financial track. Budgeting has been a learning process for me. It started out as simple as “Income minus expenses equals what’s left to save” or Income – Expenses = Savings.

I say it has been a learning process because I try to learn when I get budget “surprises”. You know, you have an unplanned expense that you probably should have seen coming. It doesn’t qualify as an emergency but it still takes a hit on your budget.

Every time I get an unplanned expense I turn around, open my budget spreadsheet, and make an adjustment. The unplanned expense becomes the planned expense.

This can complicate things if you let it so I do try to categorize and make an educated guess as to what the monthly (and thus, annual) expense might be. Learn and adjust as you go. If you still spend more than you planned you need to set aside more money in the budget. Find yourself with a budget surplus in that category? Make a downward adjustment.

Here’s 8 expenses that you’ll probably forget to put in your original budget plan.

Don’t Forget These Budget Expenses

Annual medical expenses

You know that every year you or a member of your family needs to go to the doctor for:

  • annual physical
  • annual gynecologist visit
  • biannual teeth cleaning at the dentist
  • annual eye exam

… so why not plan for it? You should know your insurance situation well enough to make an educated guess at what the total cost of the visits should be. Remember to factor in meeting a deductible or co-pay. Also remember to factor in any additional costs stemming from these visits. For example, I order contacts online after receiving my updated prescription from my eye care professional. I need to plan in advance for that expense.

Landscaping expenses

Think of all the things that go into maintaining your yard:

  • fertilizer and weed killer
  • mowing service or mower maintenance
  • flowers to plant
  • water

… all of these can add up to quite a lot of green. Set aside some money each month to cover your annual expenditures on landscaping.

Personal care expenses

Do you like to go to the salon every few months to the tune of $75? That’s $300 per year. Instead of letting your budget take a $75 surprise (not a small amount in my household) just plan for it. Put back $25 per month and you won’t feel guilty using what you’ve budgeted for this area.

Household supplies

A lot of people I talk to like to squeeze household supplies like toilet paper, toothpaste, and cleaning supplies into groceries. Last time I checked you can’t eat toilet paper so we don’t take this stuff out of groceries.

Unexpected medical expenses

Setting aside money to get your eyes checked or your annual physical won’t, unfortunately, keep you from getting sick or having accidents. If you’ve got health insurance a large percentage of the cost of these unexpected trips to the doctor or emergency room will be covered… but not all of it. I’d much rather have money set aside (whether in a Health Savings Account or my checking account) to cover the extra co-pay and prescriptions that follow.

Pet expenses

Consider the following expenses we have with our dog:

  • food (easily planned, she eats the same amount every month)
  • flea and heart worm medication (monthly expenses)
  • annual shots

The last time we took her to get her shots it cost about $150. That can be a budget buster if things are tight. We stick $12.50 per month aside for this expense so when the time comes to get her shots we don’t have to worry about the impact on our budget.

Memberships and association expenses

My wife has a couple of memberships she maintains as a teacher. They amount to approximately $150 to $200 per year. In the months those invoices appear that amount could kill our budget. So we stick $15 per month aside ahead of time to offset the impact.

Taxes on unexpected income

This is one that I bet a lot of you forget. If you’re earning interest on a rewards checking account, savings account, or certificate of deposit the income you are paid comes without tax taken from it. If you earn a significant amount of 1099 income through interest and freelance contracting work you need to make quarterly tax payments. Failing to do so can result in a tax penalty being tacked onto your annual tax bill.

We set aside 25% of my freelancing income and our interest income from all of our bank accounts. That’s usually a bit too much because tax deductions drop us below that tax bracket, but it never hurts to set aside too much money.

Is there something missing from the list? Let me know what other expenses you think should be on the list in the comments section below.

{ 9 comments }

The Happy Rock February 17, 2011 at 6:45 am

People like to forget about auto insurances(including AAA). Some people are OK with paying auto insurance monthly and just accept the service charge each month.

Also gifts. Christmas spending, but also things like kids/family birthday parties and their associated gifts.

Kevin February 17, 2011 at 7:03 am

Great points. We pay our insurance annually, but we do save for it monthly. Same thing on the gifts… planning ahead will keep your budget afloat.

Thanks for stopping by!

Money Beagle February 17, 2011 at 7:06 am

We actually have a separate fund with many of the items above you mentioned, so rarely have we been surprised by any of the categories. The one I was surprised about one year was pet expenses, just because the cats seemed to get old all of a sudden, requiring more frequent visits to the vet, plus special food and medicine.

One thing that I always forget that sneaks up on me is subscriptions. We subscribe to the newspaper, and that bill comes once every six months, plus various magazine subscriptions we have. They aren’t much but they are always D’oh moments.

Kevin February 17, 2011 at 7:09 am

Sounds like a perfect time to add “newspaper subscription” to the budget and “pay” it to yourself monthly. That’s a great example of the process we go through… you get a “d’oh!” and you react by adding it to the monthly budget.

Steve in Denmark February 17, 2011 at 8:33 am

I wouldn’t mind someone explaining how I get to the stage of being able to save for (for instance) quarterly, bi-annual and yearly bills, monthly.
I agree whole-heartedly with Kevin’s introduction there and I see our budget as a constant work in progress. But the time I can see it’s gonna take to get to the stage where I can save for a yearly bill, but still have enough in the kitty to pay it and everything else that particular month, is still a year away.
If, for instance, I’d set the budget in December, and started putting aside each month enough to cover all the bills that need to be paid quarterly and yearly – we’d be bankrupt in January and February. As it stands, we only earn more than our outgoings, 6 (non-consequetive) months a year. Fortunately, the months where we earn more than our outgoings, keep us afloat the rest of the time.
As it stands, I’ve got everything built in to the spreadsheet, so apart from the car falling apart (or me bike puncturing yet again), there aren’t any real surprises to be had. I do underestimate my earnings a little (I have a 6 week plan, but there can be different lengths of shifts, evening or weekend shifts, so it’s difficult to guess how much I earn each month), so that we can generally be just a little pleasantly surprised come pay day 😉
What I’m now doing, is building up the ‘reserve’ in the main account, so that this time next year(ish), there will be each month, enough to pay the worst month of the year’s bills. THEN, I’ll start sending the excess over to another account. We do currently also pay into two savings accounts (and have private and work pensions, etc). I could stop the savings payments, and the reserve would build up earlier, but that wouldn’t cover any ‘shocks’ until the reserve is ready.
You see the problem?

Golfing Girl February 18, 2011 at 10:01 am

Funeral expenses. I have three grandparents in their mid-late 80’s who live 12 hours away. It’s not a matter of if, but when I’ll need to travel home for funerals so I’ve been struggling with this one and how to plan/budget for it so we don’t have to raid the emergency fund.

Determined February 18, 2011 at 10:25 am

It’s a no brainer, but I always forget to budget for travel to family get togethers. We live 5 hours from the closest sibling, and 12 hours from our parents. Sometimes the family will get together for special events and the cost always sneaks up on us.

D R @ Motivating Minutes February 20, 2011 at 6:32 pm

You covered just about everything I tend to forget. Good post.

The Prudent Planner February 27, 2011 at 6:29 pm

Those pet expenses can really add up. We were lucky to find a way to save a great deal of money. At our local petsmart is a veterinary clinic called banfield. They have a wellness plan that is only $30 a month. I’ve found that this amount, even though it’s a bit high, has actually saved us close to $2,000 so far b/c everytime we have an emergency or need a shot or medication, it’s all free. Similar to pet insurance but you get a great more benefits upfront.

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