Surprisingly, one of the most important expenses that most people fail to plan for are household repairs such as a leaking roof or a broken appliance. In order to avoid financial ruin, stay ahead of the game by saving 3% of your annual income for repairs. So, if you make $30,000 a year, then you need to save $900 a year. If you purchased a new home, your appliances should last about 10 to 15 years and your roof should be good for at least 30 years! If you purchased an older home, you might have 5 years left on the appliances and 10 or so left on the roof.
I know that may sound like a lot when you are struggling to make ends meet, but remember that you have to take care of your home so it can take care of you.
This is another monthly expense that most people underestimate. Establishing a food budget can be tricky because food prices can skyrocket and sales can be scarce. On top of all that, numerous of articles share that Americans waste upwards of 35 million pounds of food each year! A lot of that has to do with the fact that we forget the food is in our refrigerators and the other half can be attributed to eating out.
Look over the past 6 months of expenses and really think long and hard about the foods you consume. Are you buying fresh produce and letting it spoil because of its short shelf-life? If that’s the case, you might want to opt for frozen vegetables which offers a larger quantity and will last longer. Other areas to look at include buying products that have longer shelf lives like rice, oatmeal, and spices. Reviewing your food budget every 6 months can help you save upwards of 25% a year if you make the adjustments as you find problems in your spending.
With all the bills we have to pay, the idea of planning to buy other people gifts seems silly. But often times we charge presents for friends and family on our credit cards because we failed to budget enough money for Mother’s Day, Christmas, baby and wedding showers, and birthdays. Depending on the occasion, one could expect to spend anywhere from $25 to $300 on special occasions and holidays (excluding Christmas)!!!!
If you usually spend $25 on gifts for occasions outside of Christmas, then plan a month or two ahead to ensure that the extra money will not derail your budget. If you tend to spend a lot of money on Christmas gifts and dinners, then start saving your Christmas budget in January! Saving $100 a month and you will have $1200 to spend on family and friends…hopefully that should be enough to buy a few kiddie toys, a tie for Dad, and baskets and cards everyone else in the family.
You never know when you are going to run short on money or when that appliance is going to break. The best way to avoid a complete financial meltdown is to plan for these expenses in advance and reduce the risk of putting yourself in debt.
Images: Article Space, Automobileom, and Pop Sugar