5 Things you are Missing in your Budget
Nobody likes being surprised by big expenses.
At PWR, every spending plan we create builds in room for the five most commonly underestimated costs. These are the line items where people either leave the box blank or put down a number that’s too low. Because I review spending plans all the time, I have a good sense of what’s realistic - and I’d rather flag something early than have it affect your goals.
When that happens, I’ll usually adjust the number upward (highlighted in green so it stands out) and ask clients if they’d like to stick with my estimate. Most of the time, they’re on board.
For these items in particular - it’s simply about making sure the plan reflects reality and avoids unnecessary stress down the road.
Appliance Repairs / Replacement
I have found socks stuffed in a crayon box, a travel tissue pack in my calculator case, and a mandarin orange in an Easter egg. Given that, it was no surprise when our daughter put coins in the slits of a standing humidifier as if it were a game of Connect Four, prompting a call to our repair person. Having a reserve for new appliances and repairs makes it easier to laugh about the situation rather than stress about the money.
Home Repairs
Plumbing emergencies, hot water replacements, and rodent remediation - these are just a few of the things I hear of all the time that were unexpected and expensive. You need to have at least 5-10K a year earmarked or house things that come up, potentially even more depending on the size and age of the house.
Auto Maintenance
Stay on top of your auto maintenance schedule and set aside funds for unexpected repairs.
Summer Camps
If we are in the middle of the school year, parents tend to document only daycare and afterschool costs. When I ask if they do summer camps, almost always they say “Oh yes! We forgot about that”. And camps are expensive! So we want to make sure you have a cushion for that in your budget.
Pet Costs and Boarding
At our initial meeting, we discuss current and potential pets with our clients to ensure that we are planning for this cost appropriately. Just like kids, they can be expensive but worth every penny.
Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.
Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.