In determining your “Ideal Back to School Budget,” you must next understand the difference between Want and Need. That sounds self-explanatory until you’re walking down the aisle and you see a “great deal.” However, the truth is it’s not a “great deal” if you can’t afford it. And if it’s not in your budget, you are spending money you wouldn’t normally spend; that is the bottom line.
Keep in mind that many of these expenses are not monthly. Consequently, you should take the amount of that expense and divide by 12 months if it’s an annual total or divide by 6 if it’s a semi-annual expense. For items like tires and brakes,school supplies & fees. divide by 24 or 36 months, depending on how often you need that repair or fee. So to further help you in understanding the distinction, your Needs are going to come from the “constants” and “absolute necessities”
Some of these are:
- cell phone OR home phone (having both is usually a Want, not a Need)
- monthly prescriptions
- insurances: home or renters, automobile, life, and health
- taxes: property and income taxes not withheld
- child support or alimony payments not deducted from your paycheck
- gasoline to get to and from work and daycare; repairs required to keep your car safely on the road
- laundry & clothing that fits
- future income taxes (if you typically owe every year)
- healthcare: medical and optical expenses required for you to earn an income
- school expenses like supplies and mandatory field trips
- license plates, and personal grooming like haircuts, shampoos and soaps.
Your Wants then, will come from the “other expenses” paragraph. Some of those are: ·
- (new) clothing for you and your child(ren) and shoes they’ve outgrown
- charitable contributions
- school/work lunches and eating out
- cable TV/internet
- pet care
- recreation that costs money
- additional grooming expenses like coloring/highlights, permanents, manicures/pedicures, perfume, salon hair and nail products, etc.
- gifts for Christmas/Hanukkah, birthdays, anniversaries, graduation, etc.