More and more people are realizing that budgeting is important, which is great. However, most of us are not very good at it. We often create budgets with a goal in mind – to get out of debt, to save for retirement, to make a major life purchase – and look for ways to optimize our ability to achieve those goals. For many people, that means making drastic cuts to current spending. In fact, most of us associate starting a new budget with tightening our belts.
However, when it comes to budgeting, you can’t cut everything. While trimming the proverbial fat in your spending is important, some things you absolutely need to pay for each month, however you can, and cutting them in some cases could actually make your financial situation worse. Let’s look at four expenses you should never sacrifice in your household budget.
1. Healthy Meals
When people first start out with budgeting, they often try to save money on their groceries. However, in doing so, ensure you don’t free up a few dollars in your budget at the expense of healthy food. Eating healthy increases your well-being, and it can be a form of preventative care as well. After all, the better you eat, the better chance you have of staying out of the doctor’s office.
If you want to save money on food, try making use of coupons more, or join a discount warehouse outlet such as Sam’s Club or Costco. Better yet, bring a bag lunch to work and you’ll realize substantial cash savings for your new budget. Cut back on all that dining out at restaurants too; find other, less costly activities instead.
When money starts to get tight and you have to shift funds around to make ends meet, make sure you keep paying your rent or mortgage. Having a place to live is critical, and losing a home or being evicted is a traumatic and destabilizing event for any family. The effects of losing your home can wind up affecting other areas of your life as well, such as your credit rating or the places you children can attend school.
Cut other, less critical areas of your budget before you decide not to pay your rent or mortgage. If you’re renting and money is tight, you could ask your landlord to accept a partial payment for a month, and promise to make it up later (if you think you’ll have more money coming in a few weeks). If you’re a homeowner, you could attempt to refinance your home to obtain a monthly payment that makes you comfortable. Finally, whether you’re a renter or a homeowner, you could also consider moving to more affordable accommodations before your housing payments put you in a difficult situation.
Your budget should never put your health at risk, either. Make sure you continue to pay for and receive the critical health and dental care that you need to stay healthy. Canceling insurance coverage or skipping a doctor visit to avoid a co-payment could put your health at risk. If you aren’t healthy, you may put your capacity to earn money to support your budget in peril as well.
If you’re prescribed certain medications to treat long-term health conditions, resist the urge to stop taking them just to save some money. Instead, when it comes to healthcare, you should look for ways to maintain the quality of care you currently receive while cutting some of the costs associated with it. One way to save money on healthcare is to see if you can substitute generic drugs for your current brand name prescription. You may be able to shop around for different health or dental plans that have lower premiums and reduced co-payments as well. However you do it, just ensure that any savings in medical care don’t come at the expense of your own personal well-being.
Once you stop saving – for retirement, for your kids’ college, or for an unexpected expense – it’s very difficult to get started once again. If you’re starting a new budget, make sure that you don’t eliminate monthly savings in favor of a short-term goal, such as reducing credit card debt. If money is tight, you can temporarily decrease your monthly savings in order to ensure you remain solvent. Saving a little bit of money is certainly better than saving nothing at all.
Budgeting is extremely important. However, make sure you’re careful when you decide to enact a household budget, especially if it’s your very first one. When you start planning to reduce spending, ensure that the cuts you make don’t have negative impacts on your quality of life, your health, or your future. So, keep these four expenses in mind as you’re crunching the numbers and you should be in good shape when you finalize that budget.