We made it. It’s 2022. The holiday season is over and now we have… debt? While we all get back to work to pay off our generous gifting, it is a perfect time to start thinking about ways we can better plan our budget in the new year.


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There are a lot of expenses that, although they are common and, in some cases, annual, we don’t think to plan for them in our budget. Here are a few I think you should work into your budget this year.

The holidays.

Nothing kills the holiday spirit quite like a monstrous credit card bill. You don’t want to be spending the next few years trying to pay off the gifts you bought your family for Christmas or Hanukkah.

We all know we tend to overspend during the holidays, so having a separate savings account that you can drop a few dollars into regularly throughout the year can make things a lot easier come December.

Alternatively (or additionally), picking up a few gifts throughout the year and stashing them away until the holidays could mean a lot less impulse shopping as you scour the shelves for last minute gifts.

Healthcare.

We all are aware of the high costs of healthcare, but we generally don’t budget properly for those expenses, particularly those healthcare expenses that come later in life. The older you get, the more you’re likely to spend on medical visits and medication.

Planning for those expenses could mean opening a Health Savings Account, investing in long-term care insurance or making sure you’re contributing to a liquid investment account, so you have money set aside in the future.

On a less financial note, taking good care of your physical and mental health now will have a great impact on your health in the future. It’s much easier to stay healthy than it is to get healthy later.

Vacations.

Taking a vacation is time to relax, unwind and focus on something other than your day-to-day life. But stressing about the bill you’ll receive when you get home can take some of the fun out of the long-anticipated trip.

When planning a trip, remember to not only set aside the money for the flights and hotels, but also for meals, incidentals, excursions and even a little shopping. Knowing you have budgeted for the entire trip, not just getting there, will make returning to reality a lot less stressful.

New cars.

While some people like to get a new car every two or three years, the most cost-effective method of car ownership is the “drive it until the wheels fall off” ideology.

When you finish paying off your car loan, keep making those payments—but make them to your savings. After five years of the same bill every month, you probably don’t miss that $500. Redirect it to a separate savings bucket so when it’s time to replace your vehicle, you’ll be able to pay in cash or at least have a hefty down payment on hand.

Planned obsolescence.

If you talk to your parents or grandparents about what they planned to have to pay for later in life, you won’t likely hear things like streaming services or even cell phone bills. Life is changing quickly, and you’ll want to make sure your financial plan can account for costs that don’t exist yet.

Basically, the future will always be more expensive than we expect, so build in a raise for yourself in your plan so you can afford the hovercraft or whatever it is that will someday become the norm.

The “what ifs.”

If you've ever lived in a condominium and had a condominium association, you’ll have heard the term “replacement reserves.” As the owner of a single-family home, you’ll want to have your own personal replacement reserve, because driveways, rooves, windows and even foundations only last so long.

Know the age of your infrastructure and appliances so you can plan ahead for when different things will need to be repaired or replaced, so you’re not stuck paying for a new driveway and a new HVAC system at the same time.

The lesson:

We all experience a lot of the same expenses throughout life, and yet they still manage to surprise us. Planning ahead and having cash reserves will make those expenses more bearable and make your life a lot less stressful.

By Eric Brotman, Contributor

© 2022 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.

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Matthew Etter, CFP®
Partner, President
Signet Financial Management
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Daniel DiVizio, CFP®, CRC®
Financial Planning Director, Wealth Management
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