A monthly budget lets you allocate income towards expenses in a planned manner so that you don't face any nasty surprises or shocks towards the end of the month. Of course, we all mandatorily plan for certain fixed expenses in our monthly budget – such as groceries, utility bill payments, children's education, rent, office commute, planned vacation, etc. 

However, many of us tend to ignore certain not-so-important yet money-sucking expenses. This article will list six such expenses and how to prepare for them.

1) Emergency fund

An emergency fund is required for meeting expenses during unplanned or unexpected circumstances. Some of these include:

• Job loss
• Medical emergency
• Salary cuts or delays

During any of the above circumstances, one can rely on an emergency fund to get through the short-term emergency. The size of the emergency fund depends on whether you are salaried or self-employed. If you are salaried, it also depends on whether your company is doing well financially and whether the industry you work in is flourishing.

For example, assume that an individual is salaried and working in a company that is doing well financially. In such a scenario, an individual can have an emergency fund equivalent to 3-6 months' salary. 

What if an individual is self-employed and has uneven monthly cash flows? What if an individual works in an airline or hospitality company where salary delays or pay cuts sometimes happens? In such a scenario, an individual should ideally have an emergency fund equivalent to 9-12 months' income/salary.

The emergency fund should be able to take care of regular expenses, EMIs, insurance premiums, investments towards financial goals, etc. It should be kept in a separate savings account and used only when any of the above-discussed situations arise.

You can transfer your emergency fund money to an IDFC FIRST Bank Savings Account. The account provides industry-leading features, such as:

• High interest rate
• Monthly interest credit

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2) House upkeep
 

Your house and household appliances need regular servicing and may require periodic repairs. You cannot predict which appliance will stop working when and the amount required to get it working again. So, set aside some money for these unexpected expenses.

As with the emergency fund, you should set aside some money for house upkeep in your budget planner. Transfer the money set aside for this to a separate savings account. As and when the money is used from this account, you should replenish it.

3) Apparel and personal accessories
 

You will want to look your best during festivals, corporate parties, family weddings, and other occasions. To achieve this, you will need to buy fashionable clothes and personal accessories. However, these big-ticket expenses can impact your regular monthly budget. To manage this situation, you may set aside some money for this purpose.

Also, you can shop during a sale to save money. IDFC FIRST Bank comes up with discount offers from various online and offline fashion merchants from time to time. So, go ahead and flash your IDFC FIRST Bank debit card to avail of these offers.

4) Guests/dining out
 

Guests could turn up at your house when you least expect them, and you may need to take them out for dinner or sightseeing. Don't worry about your monthly budget getting affected. Make a provision for this in your regular budget, and remember to transfer this money to that separate savings account. The IDFC FIRST Bank Debit Card comes with various dining and food delivery offers, and you also get up to 20% dining discount at various restaurants.So, welcome your unexpected guests and enjoy your favourite cuisine with them at the best restaurants at a lip-smacking discount. If you don't feel like going out, order food through a food delivery app and still enjoy a discount.

5) Last-minute travel
 

You may be required to travel at short notice, and it can be quite expensive if you have to take a flight at the last moment. Instead of disturbing your entire monthly budget calendar, make a provision for this. Transfer this money to that separate savings account and use it whenever needed.

The IDFC FIRST Bank debit card comes with various travel-related offers from time to time. These include discounts on booking flight tickets, hotel accommodation, etc., that you can avail of and save money.

 6) Pet care
 

Like humans, animals are also vulnerable to falling ill. If you have a pet at home, you must make a budgetary provision for their health, just as you do for yourself and transfer this amount to that separate savings account.

Making a provision for one-time expenses

While making your monthly budget, apart from regular expenses, you should make a provision for one-time annual expenses. These include insurance premiums, property tax, school/college fees, society maintenance, etc. Some of these expenses may be monthly, quarterly, or half-yearly rather than yearly.

If any of these expenses occur every month, you can pay for them from your regular monthly budget. However, if they are quarterly, half-yearly, or yearly, you must make a provision for them in your monthly budget. You can transfer this money to that separate savings account and use the money when required. 

For example, assume you have to pay an annual insurance premium of Rs 60,000. Divide this amount by 12, and you will arrive at the monthly provision amount. So, in this case, you will have to set aside Rs 5000 every month in that separate savings account. You can do the same thing for other one-time expenses.

Personal finance management
 

IDFC FIRST Bank provides its customers with personal finance management for a smoother money management experience through mobile banking. Its key features include:

Smart statement:

Customers can get a consolidated view of all their transactions sorted by category. You can check your savings and credit card transactions all in one place

Money manager:

It provides a simplified, interactive platform to track and analyse spending effectively. You can analyse your spending on a monthly or annual basis

Personalised offers:

The bank sends you specially curated insights and offers based on your past transaction patterns, thus helping you optimise your savings by availing discounts and deals

In conclusion

While making a budget, many people tend to consider only their regular monthly expenses. They don't take into account unexpected costs or one-time annual expenses. As a result, their monthly budget takes a hit when such expenses arise. So, the next time you do the budgeting exercise, make a comprehensive budget with provisions for regular, one-time, and unplanned expenses. This way, you can sail through the entire month and even the year without any stress.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.