Published in: Banks | Dec. 3, 2019

3 Things I Always Budget for That Most People Probably Don't

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Budgeting is something I’ve done since college, and through the years, it’s helped me achieve goals -- like paying off my student loans, building an emergency fund, and buying a home. But my budget isn’t something I threw together in 10 minutes. Rather, I spent a lot of time setting it up initially, and I constantly revisit it to account for changes to my bills and income. 

One thing I’ve noticed when talking to other people with budgets, however, is that they tend to forget certain key categories in the course of mapping out their expenses. Here are a few such categories that I make a point of accounting for -- and for good reason. 

A male plumber fixing the pipes under a sink.

Image source: Getty Images

1. Emergency home repairs

As a homeowner, I’m all too familiar with being woken up in the middle of the night to the sound of a pipe bursting, or coming home on a hot day to find that my air conditioner has stopped functioning. It’s a lousy situation to be in, and thankfully, I have emergency savings to tap when things like that happen. But I also have a line item in my budget for home repairs so that when they pop up, I’m not raiding my savings account too heavily. 

For example, I’ll typically budget $200 a month for home repairs on top of the $400 a month I budget for regular, predictable maintenance. For months when there’s no repair needed, that money goes into savings so that when emergency repairs do strike, I’m at least somewhat covered. 

2. Weddings

Weddings aren’t the sort of thing that land on my calendar every month, but it’s safe to say that over the past decade, I’ve had at least one close friend get married per year. Some of those weddings required me to travel; others simply required me to show up with a gift. But I’ve also been a bridesmaid in a few of those weddings, and most recently, that role left me $2,000 in the hole. 

As such, I always make a point to budget $100 a month for weddings, even when there are no actual dates on my calendar. What typically happens is that I go most of the year without a wedding, but then spend hundreds of dollars on a single event. And this way, I’m prepared. 

3. Savings

One major mistake I see so many people make is forgetting to actually incorporate savings into their budgets. But that’s an important line item to have in there. As a general rule, it’s wise to set aside 15% to 20% of your income for savings, particularly toward retirement. But if you don’t yet have emergency savings, you should actually bump those percentages up to "as much as possible" until you have at least three months of essential living expenses socked away in a savings account. 

Savings is not just an essential line item in my budget; it’s actually the top line item on the spreadsheet I maintain. What I do is take my monthly income, subtract 20% of that total, and work backwards from there -- meaning, I don’t allow myself to spend more than 80% of my earnings, and I make sure my expenses fit into that. And when my bills start to increase, I either work on boosting my earnings (as a freelancer, I can work more hours or take on more projects to do so) or start cutting back on other expenses (like travel, entertainment, and dining out) to hit that target. 

Forgetting the aforementioned items in your budget could create a scenario where you’re grappling with sudden expenses and falling short on your savings goals. Be sure to account for home repairs (if you own a home), weddings or other obligatory events, and, of course, savings. That way you'll be creating a budget that will serve you well. 

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