2010

I know you are all still Christmas shopping and it's hard to think about next year already.
But now would be a good time to sit down as a couple, family or just yourself and look at your overall 2010 budget.
I personally write out a monthly budget, which includes all my groceries, gas, bills, etc. This budget looks pretty similar from month to month since most of my bills are monthly.
But, I find there are a lot of things that come up in a year that I am not always ready for that seem more like "extras." So I create a separate list for the bigger things that I want/need for the year.

For example, in our house, the "extras" for 2010 will include:
-Soccer x 2
-Baseball
-Hockey (that's a big one)
-Swimming lessons
-Piano
-Summer holiday up north
-Christmas Presents


On your list, you might add items like:
-winter vacation
-saving up for new car
-renovation project for the house
-mini-vacations every other month
-skiing
-kids class trip
-new mattress
-new fireplace
-Etc.

With these extra, you can just add them to your monthly budget, when they come due.
I personally find it a bit confusing since every month would be a different amount.
So, I add up all the things that I'm anticipating for the year and look at the total amount.
For the sake of this example, let's say those expenses added up to $6000.00 for the year. That would mean that I would have to save $500 a month extra, on top of my budget, so I can afford all the things on my list for the year. If I can't afford to add this amount to my budget, that means I can't afford all the things on my list and I have to prioritize what I really want from that list.
I actually choose to use my tax refund for my extras so I still need to save monthly to make up the difference, but not as high as an amount.

The problem I see when people budget is that they generally know how much they spend every month because their bills stay the same from month to month. And for the most part, everyone's income stays the same from month to month too.
What happens to throw people off is when their child's class trip comes up and they owe $450 or the hockey registration is due this month and they can't even believe what the bill is.
Even, at Christmas. Everyone knows when Christmas is and yet every year too many people go in debt over presents.
I would rather see people anticipate expenses for the year and find a system that works for them. That's why I'm telling you what I do - save monthly for these extra expenses. You might choose to do something differently.
Whatever system you use, do something, so that these extra expenses don't surprise you when they happen.
I hope you have a great Christmas and I will talk to you again in the new year!