Most of us create budgets that focus on immediate needs, like mortgage, rent, and bills. What we generally fail to budget for are the things that ultimately put us in financial trouble.
This is something most of us don’t really pay much attention to, but you should if you are likely to pay taxes over the course of a year. Put it in your budget and track how much you put away in savings for it. This can save you sleepless nights as you try to figure out how you can pay your taxes and still cover your living expenses.
With 401Ks and IRAs and a wealth of other things, you would think this one is easy, but still most people fail to save enough for retirement. If you build retirement savings into your budget, it becomes a much more important focus for your finances. Since you are regularly checking how much you have put away, you will be more mindful of overspending on things you don’t need.
The problem with adding these to your budget is that you never know when you are going to have an emergency. That exactly why you need a separate savings for them. My family is guilty of not putting enough away according to the budget, in part because we haven’t really dipped into the emergency savings much since we started it. Now that the cars are getting older though, we are much more likely to need money for the unexpected.
You would think this one would be a given, but when people think of budgets they tend to miss out on vacations. Like emergencies, you need to ensure that you have what you need for vacation, you need to build savings specifically for vacations. This will keep you from whipping out the credit cards and going further into debt, as well as getting you to start planning for expenses well in advance of the trip.