There are certain aspects of our financial lives that sometimes get shoved under the carpet so to speak. These are the costs for which we don't regularly see bills and that therefore we don't always take into consideration as part of our financial planning. And nowadays with direct deposit, automated bill pay, and similar financial "conveniences", it's becoming increasingly easy to avoid direct contact with certain aspects of our personal finances. Unfortunately, this lack of contact can have an affect on things like expense tracking, budgeting, and retirement planning. Here are a few such aspects that play heavily into our financial planning and that can skew our ability to fully take all costs of our regular financial lives into account.
Property Taxes and Homeowners Insurance
Those dastardly property taxes and homeowners insurance costs! Just about the time I've forgotten about them, they rear their ugly heads again. While in our new downsized condo, both expenses are lower than they used to be when we owned a larger home, they are still present. With condo contents insurance being about the same as our old renters insurance (just over $100 a year), it doesn't make much of an impact on our monthly budget. However, I tend to break our property taxes, which run closer to $3,000 a year, into monthly cost increments, accruing these totals monthly so that when our bi-annual bill arrives, even though it might catch us by surprise when it comes to remembering it's arrival, it doesn't catch us by surprise financially.
Health insurance is certainly one of those costs that can hit hard, but it is also something that is somewhat "out of sight, out of mind" when it comes to regularly occurring expenses. Since in our case, as it is with many people these days, our health insurance expenses are taken out pre-tax before a paycheck is even seen, it tends to sometimes get overlooked as a regular cost item. When we do see a pay stub, which is seldom with direct deposit, it kind of blends in with all those other items like state and federal taxes, Medicare and Social Security taxes, and similar itemized deductions that are taken from a regular paycheck.
However, when we're talking about almost $400 a month for maintaining health care coverage, it can be a huge aspect of our monthly expenditures and therefore must be factored into our budget just like any other line item would be.
As self-employed individual, I have to track, gauge and handle my personal income taxes regularly, but for my wife who works for a regular employer, this financial duty is done for her. This means that it's another one of those costs that is ever-present but that can kind of sneak up on us as well. Come year's end, since I am typically running a little behind on my taxes owed, this can leave us paying additional taxes if we don't plan well. Therefore, we tend to push the rate my wife is taxed at on her paychecks up a little higher to balance the amount that I will owe in the fourth quarter so that we are left about even or even getting some money back. Then I balance the books with my wife, since it's easier to do with her than the federal government.
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