Are You Living on a Reasonable Monthly Budget?

Are You Living on a Reasonable Monthly Budget?If you are living on a monthly budget, bravo! You have taken an important step toward financial responsibility, one that not everyone takes. However, do you have a reasonable budget that covers all the basics? If your budget includes housing, transportation, medical, clothing, and food, you’re off to a great start. But wait, there’s more. Actually, there is quite a bit more that should be added to a reasonable monthly budget to make it sustainable for the immediate and foreseeable future.


Everyone needs an emergency fund that is immediately accessible for expenses like the home insurance deductible for a flooded basement, a refrigerator that stops working, or a costly car repair. The money for these expenses should be liquid, that is, not tied up in a long-term investment account, but available through immediate withdrawal or a debit card. Some families put away ten percent of their net income for emergencies or unexpected expenses like an unplanned weekend getaway or house guest. Any amount is preferable to saving nothing for expenses like these that can pop up anytime.


A savings account for future goals is essential for most people. You might need a college fund or save toward the next vehicle purchase, something that will be needed eventually but not right away. If the savings are not earmarked for a particular purpose, you can start an investment account or a high-yield saving account so that the funds earn interest over time.


Even those working in a career position sometimes unexpectedly lose their jobs or get bored and decide to switch careers, thus requiring further education. As children come of age, they may decide to go to college, and tuition is not cheap. Putting aside money for education now helps to offset high costs later. Don’t forget to factor in possible dormitory expenses and textbook fees.

Entertainment and Leisure

While many people often budget for entertainment expenses, sometimes they designate too little for this category. Entertainment might include activities like movies, plays, sports events, concerts, dining out or fast food (unless it’s part of the food category), coffee shop breaks, etc. These may be unplanned or seemingly minor expenses, but they add up quickly. For example, buying a specialty coffee shop beverage each day for about $3.50 adds $105 per month to the budget. Habits like smoking or regular alcohol use can be even more expensive. Vacations should also be factored into this category.

Holidays, Birthdays, and Celebrations

These may appear to be a subset of the entertainment category, which is fine, but keep in mind actual costs. A recent survey reported that the average family spends an average of $700 just for Christmas expenses, including gifts, greeting cards with postage, wrapping paper or packaging, decorations, electric for outdoor lights, dinner food, baking supplies, etc. It’s no wonder many people get stressed around the holidays if they haven’t budgeted these extra expenses. The typical birthday celebration could include a gift card, dinner, special event, and bakery cake at a total cost of perhaps $50 per person. Multiply that by number of family members, and the cost grows exponentially. Celebrations like weddings and graduations usually require a gift that may average $50 to $100, added to the cost of new clothing and travel expenses if the event is not local.

These added budget categories will vary from one person to another. Other categories not included in this list might entail hobbies, charitable giving, or medical deductibles for unexpected injuries or special needs (depending on insurance coverage).

Make time to take a good look at your monthly budget to be sure it covers all the basics as well as extra “hidden” expenses you may be paying. With a little more financial planning, you can stick to your budget and avoid falling into a money pit that could set you back a considerable amount.

Are You Living on a Reasonable Monthly Budget?

Sweating the Big Stuff

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