If you're constantly having to pull out your credit card because you couldn't stick to your budget, don't assume your willpower needs a boost. The problem may be that you're overlooking -- or choosing to ignore -- key expenses that you should be setting money aside for.
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"Consumers often don't include in their budgets the real sinkholes that are costing them on a monthly or yearly basis," says Todd Mark, vice president of education for Consumer Credit Counseling Service of Greater Dallas.
While you've probably got your mortgage and car payments covered, here are some common budgeting holes that will leave you coming up short every time.
1. The expenses you deny. Failing to budget for some expenses can be a way of staying in denial about your spending habits. There are some expenses people purposely fail to include in their budget, says Mark, because they aren't proud of the fact that that they're spending so much on the activity, such as smoking, gambling or even using cash to carry on an affair.
There are other expenses people don't include because they tell themselves they're spending less on these things than they actually are. For example, you might not buy your snacks in the grocery store where they would be part of the grocery bill, but rather you stop at the workplace vending machine and spend a couple dollars each day, says Danny Kofke, author of "A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money." Though the junk-food habit may be substantial enough to warrant a budget line all to itself, it's often easier to file the expenses under 'miscellaneous.'
To ensure that your budget truly reflects your spending habits, "try not to have 'miscellaneous' account for more than 10 percent of your income," suggests Sally Herigstad, author of "Help! I Can't Pay My Bills." As far as keeping your vices out of your spending plan, ignorance may be bliss, but "if you're purposely not including certain expenses, how would you expect to have a successful budget?" Mark says.
2. The non-monthly expenses you forget. It's easy to remember those bills that come every month, but the ones that come around once or twice a year, such as the AAA membership dues, the quarterly exterminator bill or insurance premiums can slip your mind when you're creating your monthly spending plan. When creating your budget, pull bank statements, credit card bills and receipts from the past year and note the cost of expenses that don't occur every month, suggests Mark. Divide the amount of these bills by 12 and put that much cash aside each month so you'll have the money when the bills come due.
3. The happy occasions you can't miss. It should go without saying that you're setting aside money in your budget for dreaded emergencies such as car repairs, plumbing emergencies or that new roof. But what about Grandma's surprise 90th birthday party or the last-minute reception after your brother elopes? While you may not be able to accept every invitation, there's likely going to be something good that happens in the life of a loved one that you'll want to be a part of, and you may need money to travel and spend on gifts, says Harrine Freeman, author of "How to Get Out of Debt: Get an 'A' Credit Rating for Free." Create an account in which you set aside money for those occasions so you can celebrate without suffering a debt hangover later.
4. The things that change over time. One surefire way to have holes in your budget is to fail to update it on a regular basis. No one is immune to such mistakes -- even the professionals, says Mary Ann Marriott, a Nova Scotia-based financial counselor who forgot to budget for her property taxes after she refinanced and they were no longer included in the mortgage payment. "I was reminded when my tax bill came," Marriott says. Updating your budget annually and every time you experience a major life change will help you avoid having a budget that doesn't account for a growing family, a new pet or even an empty nest.
5. The expenses of the season. Sure, everyone knows to put aside extra money for the holidays, but what about back-to-school shopping, the landscaping costs of the summer and even that month in which all of your family birthdays fall days apart? When you look at your bank statements to see when non-monthly bills occur, also note times when you spend more cash.
To get an accurate gauge of your cash spending habits, make sure you don't underestimate what you're spending in superstores, such as Target or WalMart, where it's easy to tell yourself you spent $100 on groceries when in reality you spent $40 on groceries and $60 on clothes and entertainment. Once you have a handle on when your cash needs are expected to grow, you can set aside enough to ensure that your budget holds up year-round.
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