Martin warns that sometimes unexpected expenses can blow a budget.
This is my first year out of college. This is my first year with a job. This is my first year handling my finances for real in the real world. But this is not my first year not living at home.
While I was in college, I never noticed how much I traveled and how much I spent on traveling. This fall, as I got ready to start my “adult” life, I drew up a budget. I included all the obvious things (rent, food, etc.). One thing I neglected was traveling:
- I grew up in Washington, D.C.
- I went to college in New York City
- My brother is attending college in Boston
- My fiancee runs track, which means I stpend a good deal of my weekends on the road.
This fall was especially busy — I visited D.C. and Boston numerous times. I spent a ton of cash of traveling, despite taking the Greyhound bus everywhere. Family is important to my fiancee and me. It’s difficult to make the choice not to see family. Unfortunately, we were unable to visit hers. Roundtrip airfare to Michigan (where she grew up) was prohibitively expensive ($350+ per person). I can’t rationalize spending $700+ dollars on a three-day visit.
This coming year we are going to have to plan our trips better and save money ahead of time to better budget our travel.
Each of us has recurring expenses that cost more than we think. There’s no way to be sure how we’re spending money unless we track every penny we spend. Only then can we draw up realistic budgets.
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This article is about Budgeting, Choices
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Get Rich Slow,
This is a good posting and you make an important point.
I just wanted to add one comment: one shouldn’t feel to shook up if one overspends or goes over ones alloted budget. They are more like guidelines to keep you on track, rather than iron clad rules.
Best,
James
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What I find works for us to set aside x amount of dollars/month for vacation. That way you can judge for yourself what you want to spend the vacation dollars on, one big blowout to Michigan, or a few smaller trips.
FT
http://www.MillionDollarJourney.com
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[...] Traveling [...]
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Thanks for that reminder, we are re-working our budget before the new year starts.
We are planning on one vacation next year – but it will be a long one. Luckily, we will be near/with family and thus our biggest expense will be the airline tickets. We won’t have hotel bills, to rent a car nor food expenses (unless we want them). But four airline tickets across the country are something we definitely need to budget for!
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You can allot into your budget something along the lines of “Added Expenses”.
ie. Set aside money into a special account for expenses you never would have thought of. Every time something new comes up, take it out of that account and write it up as a real expense for next year.
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One of the most important things I learned about setting up a successful budget, was to pay yourself first. Set aside money for all your expenses AFTER you payed yourself a small “allowance” each week.
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[...] Why a budget should be based on real life [...]
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