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3 Things That Every Personal Budget Needs 25 August, 2021   

You know that your budget has to include essential expenses, like rent, insurance, utilities, transportation and groceries. What else could it possibly need? Here are three extras that you need to include:

1. Emergencies

You can’t necessarily predict when your car is going to need repairs or when your plumbing will need attention from a professional plumber. These incidents are usually surprises that threaten to undermine your entire budget. That’s why you need to prepare for them. 

You should dedicate a section of your budget to emergency savings. Every month, you can take those savings and put them into an emergency fund so that you don’t have to panic about an unpredictable expense. You can simply withdraw money from your emergency fund and move forward. 

What can you do if you don’t have enough savings? If there’s an emergency and you don’t have enough in your fund to cover the expense, you could apply for a personal loan. It could help you get through this difficult situation in a hurry. 

If you’re applying for a personal loan online, check whether it’s accessible in your location. You’ll want to be sure that it’s available to your state. For instance, you would want to specifically look for personal loans in Texas if you lived in Dallas or Austin. Most online loans will not be available in every state. So, check before you apply!

2. Fun Money

If you’ve tried using a budget without much success before, you could’ve fallen victim to one of the biggest budgeting mistakes that people make: not making room for fun money. It’s important to acknowledge essentials like your rent and groceries, but it’s also important to acknowledge your spending on things like entertainment, takeout/restaurants, hobbies and other fun expenses. 

Why should you do that? Excluding fun spending from your budget is not realistic. Doing this is going to make your budget feel too restrictive. In time, you’re going to want to rebel against the rule that you set for yourself. Pretending that fun spending isn’t an element of your financial life will make you miserable and encourage you to spend irresponsibly when you can’t take it anymore. 

So, don’t be afraid to treat yourself! If you’re worried that this will inevitably lead to overspending, you should look into budget-friendly ways to treat yourself so that you feel happy and relaxed without emptying your wallet. 

3. Future Goals

You need savings to accomplish a lot of your goals. If you want to go on vacation to a tropical getaway next summer or save up to buy a house in a few years, you’re going to need to start saving right away. That money won’t pop out of thin air. 

So, make sure that your budget includes savings for your future goals. Figure out how much you can reasonably afford to set aside monthly for these goals and then put the funds into a high-yield savings account. Add to it every month and watch it grow. Soon enough, these goals will be within reach!

These three extras will make sure that your really budget works for you — now and later on. 

budget management personal budget

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