A reasonable budget that accounts for all your monthly costs can help you build financial flexibility. If you've already created a budget for your household expenses—congratulations! While many people talk about living with a budget, relatively few actually do. Of the Americans polled recently, only around a third of them have a household budget. Make sure you're not forgetting costs that may be sabotaging your efforts to save more of your hard-earned money.
Here are a few of the top budget busters to make sure you've accounted for in your budget planning:
Everyone loves a sale, but just because an item is "drastically reduced," doesn't mean you have to buy it! Sales and random, small purchases—that pricey latte every morning, lunches out, a magazine that caught your eye in the grocery line—add up. A 2018 study found that we pay up to $5,400 per year on impulse buys, and many of us don't account for that in our budgets.
It's sometimes easy to forget to account for costs that only come up every few months or only once a year, like vehicle registration fees, renter's insurance, or school bills. These can take a hefty slice from your savings if you haven't accounted for them in advanced. For these kind of expenses, try dividing up the cost into manageable monthly or weekly amounts and set it aside so you have it when you need it. This strategy is also great when saving for vacations, birthdays and holidays.
Debit card purchases
Along the line of impulsive buys are things we buy with our debit cards. More than half of us use a debit card, and most of our purchases are $50 or less—making them easy to forget about. Are you accounting for all of these purchases in your monthly budget? Some people also use their debit card to withdraw cash for small, everyday purchases. While a debit card is a convenient tool, don't forget to include debit card withdrawals and transactions in your monthly budget.
Americans love their pets. In fact, about 85 million of us own one! And although we love them, taking care of our pets can be expensive. Routine vet visits, food and treats, boarding, vitamins, grooming and toys can total thousands of dollars each year—not to mention the emergency cost if a pet requires non-routine medical care. For example, the average first-year cost of pet ownership for a medium-sized dog is more than $1,200. That will certainly take a “bite" out of your budget if you don't plan for it!
Everyone likes to be pampered, but a line item that is frequently left out of budgets is how much we spend on ourselves. Manicures and pedicures, facials and massages, haircuts and coloring, teeth whitening, tanning, expensive toiletries—the list goes on and on! Americans average $60 a month per person on personal care products and services. You can always shop at discount stores to cut your costs, but you will still need to account for them in your budget.
Making and sticking to a budget is challenging enough without these budget busters sneaking in on your efforts to be financially responsible. At Wright-Patt Credit Union, we're here to help! We want to make life a little easier for our members. That's why we offer free budget planning and easy money management tools to help you get where you want to go, faster. Visit one of our convenient Member Centers today or check out our online Education Center.