If you are new to the world of personal money management, then you have probably turned to online resources (like this one!) for ideas about how to write your budget. Looking at sample budgets can be highly informative, especially if you have no idea what you are doing. However, it is important to be aware that the sample budgets you see on websites might not be realistic for your circumstances.
There are two reasons for this. The first is that your income may be quite different from those used in sample budgets. The second reason is that certain expenses look very different depending on where you live. Here are three expense categories that are heavily influenced by location.
Geographic location plays a significant role in determining the prices that grocery stores assign to their items. Supermarkets in suburban areas tend to have lower prices than the markets and bodegas common in cities. This is partially due to the fact that larger stores can often get greater discounts from distributors than smaller stores can. When you write your budget, pay attention both to what your family eats and to the average price of food in your area.
- Homeowner’s Insurance
Depending on where you live, the available home insurance plans and their respective costs vary greatly. Insurance agencies calculate rates based on the likelihood of damage being caused by weather and crime, as well as by how much it would cost to rebuild after damage. That means if you live in a hurricane-prone area, it is likely to be reflected in your insurance rates.
However, you do not have to be resigned to paying an arm and a leg just to have coverage. Contact a local insurance agency to find out how rates are determined in your area, as well as how you can customize your plan to get the best fit for your family. Local agents are well-equipped to help you since they are familiar with your area’s unique attributes. If you can negotiate a lower rate, your budget will thank you.
No matter where you live, you need to get around somehow. For some people, getting from Point A to Point B is as easy as lacing up their tennis shoes or hopping on a bicycle. For others, it requires a hardworking vehicle and lots of gasoline.
When you write your budget, you need to consider your modes of transportation and how much they cost. A commuter in Los Angeles, CA might pay almost twice as much for gasoline as a commuter in Harrisburg, PA. Someone who walks to work every day but takes long car trips each weekend might ultimately incur higher transportation costs than someone who always takes the bus but generally sticks around town.
Budget for Your Place in Life
It is always helpful to keep in mind that your budget has to reflect your lifestyle, not someone else’s. Preexisting templates are useful for learning to budget, but you have to alter them to fit your needs. It takes a lot of trial and error to work out a system that works for your family, and locational differences are a major reason for that. Remember, no matter how many snags you hit along the way, having a budget is 100 percent worth it!