Don’t Forget These 12 Easy-to-Overlook Expenses in Your 2018 Budget

annual budget

Creating an annual budget is a great way to start the year. You can set financial goals and come up with a plan to reach them, but unexpected costs can derail your meticulous budget planning.

“We can get too focused on day-to-day expenses and overlook the larger, less frequent bills until they show up in our mailboxes,” says Kendal Perez, a savings expert for Coupon Sherpa. Creating a comprehensive annual budget is a smart way to turn surprise expenses into planned-for costs you’ve got covered.

Here are some of the most commonly overlooked expenses to make sure you include in your annual budget.

1. Long- and short-term savings

A budget should include money to reach both long- and short-term saving goals. “Include a line item in your budget for your financial goals such as retirement, savings account, college education for children, etc.,” says Harrine Freeman, a finance writer and expert on debt management.

As you plan out your budget, saving is also important to ensure that you have the cash on-hand to cover costs that crop up. “By contributing regularly to a savings account, the funds can be used to pay for unexpected expenses such as vacations and repairs,” Freeman says.

2. Financial service charges

It’s important to consider the costs of managing your money. Some of these expenses are simple, like “bank fees, out-of-network ATM fees, or overdrawn bank account fees,” Freeman points out. Proper budget planning and tracking can help cut some costs, like overdraft fees.

But there are other fees worth looking at, too. For instance, consider fees and charges for retirement accounts and investments. If you get professional help to manage your finances or file your taxes, include your advisor’s fees in your annual budget.

3. Taxes

Make sure you don’t get caught off guard by a tax bill that you can’t afford to pay.

If your income or filing status has changed since last year, revisit your paycheck withholdings to ensure they are correct. Self-employed earners or those with a side income will need to spend extra time budgeting for taxes (which are often due quarterly).

4. Out-of-pocket medical costs

Among unexpected expenses, medical costs can be the most obvious — and expensive.

“Of course, it’s impossible to plan or budget for a catastrophic accident or injury,” says Jacob Dayan, partner and co-founder of tax servicer Community Tax. “But we strongly advise our clients to put in place a budget line item for medical expenses their health insurance won’t cover.”

Spend some time with your health insurance plan and estimate how often you can expect to pay for doctors’ visits, medications, new glasses or other health aids, and planned procedures.

5. Pet care

Don’t forget the annual vet visits and bills for furry members of the household, either. “Setting a reminder in your phone a month before they are due can help ensure you put the cost of the vet visit in next month’s budget,” suggests Craig Dacy, a financial coach based in Austin, Texas.

Budget for other pet care costs like specialty foods, medications, grooming, or pet sitting.

6. Home maintenance and fees

Owning a home certainly isn’t cheap, but budgeting for non-mortgage costs like home repair and maintenance will make it more manageable.

For example, “We receive our HOA fees bill every December, and it seems to get lost in the chaos of the holiday season,” Perez says. Other costs to consider include gardening and landscaping services, housekeeping services, and replacing furniture or household items.

“Home and car repairs tend to surprise people, but these are inevitable expenses you should absolutely budget for, even though they occur irregularly,” Dayan says. Consider upping this budget item if your warranties are expiring this year, as you’ll be solely responsible for those costs.

7. Vehicle maintenance and costs

Owning a vehicle also comes with costs that are too easily forgotten. Case in point: registration fees.

“This once-per-year bill is always over $100 for both of our vehicles, so it’s a bit of a gut-punch when I’m surprised (yet again) upon receipt,” says Perez. If you pay car insurance every six months or every other month instead of monthly, make sure you’re budgeting for that, too.

You can even budget for parking and speeding tickets. When I lived in an apartment with street-only parking, I averaged two parking tickets a year at around $80 each (despite my best efforts to avoid them). I added $15 a month to my transportation budget to help cover the costs, which helped take the sting out of those tickets.

8. Fluctuating utility bills

It’s also important to account for costs that might fluctuate from month-to-month, like power and gas. “The air conditioner runs more during the summer, the heat during the winter,” says Cherie Lowe, personal finance blogger at Queen of Free. “This makes it more difficult to set a specific amount for these categories of spending.”

To offset these costs, set a budget equal to the most expensive bill you got for that utility in the past year. Then, in months where it ends up being cheaper, “use the extra that might not be used toward debt or a savings goal,” Lowe suggests.

9. Event and holiday hosting

Annual budgets can be particularly helpful for catching one-off expenses, like special celebrations and holidays.

“Most of us plan for birthdays and the big holidays like Easter, Christmas, and Valentine’s Day, but many of the smaller celebrations get overlooked,” Lowe says. This can include a Super Bowl bash or summer cookouts.

10. Gifts

Take a look at each month and plan for the costs of gift-giving. This might include events like weddings, anniversaries, graduations, and other life events. And don’t forget thank-you gifts, such as holiday tips or gifts for Teacher Appreciation Week.

11. Donations and charity

Whether you give regularly or sporadically, a budget can help you balance your spending with your giving.

“It feels good to give,” Lowe says, whether it’s to a nonprofit or someone you know who’s in need. “Putting aside a set amount, whether for a regular donation or a spur of the moment opportunity to enrich the life of another, is smart.”

12. A miscellaneous fund

Of course, it’s impossible to anticipate and track every single expense. And at some point, it can be too draining and time-consuming to try.

“A solution that can cover all of those overlooked budget items is including a ‘random needs’ line item in your budget,” Dacy suggests. “By budgeting $100 every month for random needs, your budget won’t be thrown off when a medical bill shows up in the mail or when you forget your friend’s birthday.”

Have a budget, but need help sticking to it? Here are nine strategies to stay on track, even on the weekends.

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