General Budgeting Guidelines

Here are some general budgeting guidelines and rules of thumbs that I abide by:1) People tend to overestimate discretionary expenses, such as foodand entertainment, and grossly underestimate the cost of medical care:a. It is very important in the medical category, to include anestimated out of pocket per each household members for medical, vision(annual exam, glasses once every two years, and lenses), dental (twodental hygiene visits per year), orthodontia, medication, supplies forthings like asthma, allergy shots, ands ental health visits, b. If there are no co-pays and only a deductible, divide updeductible by 12 and use this amount as a co-pay expense. If there arehealth issues, add 20% to out-of pocket expenses (insurance companiestypically cover only 80% of expenses, after the deductible issatisfied). c. If there are co-pays, estimate how many times per year eachhousehold member may go to a doctor: at least once for wellness check upand 1-2 again if they are sick ($35 co-pay x 3), divide by 12. If theclient has a condition, such as Asthma and they need to visit aphysician 6×12 – reflect that).2) Groceries for a family of 4 – $120/week; separate from this,should be items that people purchase in bulk at Costco or Sam’s Club -toilet paper, shampoo, light bulbs, etc. For a family of 4 – $50/mo. 3) Items that do not come up each month: car maintenance($45-$65/mo), covering quarterly oil changes, fluid replacement,filters, set of new tires; if the vehicles is over 10 years old, ideallyyou want to budget savings for a replacement vehicle, and if that is notfeasible, increase the maintenance expense to $65/mo.