Updated: 2/4/2020
Keeping up with a budget can be a struggle. It’s one thing to manage bills, groceries and unexpected expenses, but balancing health expenses can bring its own set of challenges and surprises into the mix. We hope some of these budgeting tips can help you create a budget that’s just right for you, including a special health budget to improve your health, decrease your overall costs and provide you with coverage should any unexpected health problems arise.
As most budgeters know, you want to start with what’s absolutely necessary when planning out your budget. After narrowing that down, you can get to the fun stuff. So first, we’ll talk about how to optimize your family health budget (as health is a necessity) and then address optimizing your family budget as a whole.
Family Health Budget
1. Stay in-network
Whatever type of insurance or plan you have, stay in-network. Typically, this will save you the most money.
2. Take the tests
Make sure you and your family receive the tests, vaccines, screenings and other care your doctor recommends that’s provided in your health plan. By staying up-to-date with these preventative tests and vaccines, you’ll keep your family healthier and save on treatment health costs you would have paid had you not gotten the preventative care.
3. Referral
If your doctor recommends you see a specialist, or if you decide to do so on your own, make sure you get a referral from your doctor. Without one, you might have to pay for these services out of your own pocket.
4. Alternatives to emergency services
Going to the ER can be costly and sometimes unnecessary for issues like the flu, minor cuts or sprains, etc. By going to an urgent care center instead, you’ll cut down on your health costs and be treated for your ailment, whatever that may be.
5. Flexible spending account
With a flexible spending account, you can choose to have a certain amount of money that’s taken from each of your paychecks and put into an account you can use to pay for certain health care services. You can find a list of what you can use this for with your HR department. If you have a flexible spending account, make sure you use it. You’ll lose what you don’t spend at the end of the year.
6. Dental care
This is an area of health that many employers are cutting because of the increased cost of health care. Don’t lose your dental care because it is crucial for your overall health. Put it into your budget. Consider a discount dental plan. These plans were made to save you money and they won’t break the bank. Your family will still get the dental care they need, improving their overall health and lowering your health costs.
Your Family Budget as a Whole
1. Outlook Adjustment
First, when it comes to budgeting, make sure you have the right attitude about it. Don’t look at it as a punishment. Look at budgeting as a way of getting out of debt, buying a home, buying a car, etc., and you will be much more successful at it.
2. Flexibility
Don’t automatically assume that your budget is written in stone and can’t be adjusted or changed when needed. To begin your budget, start with more conservative expectations so you don’t set yourself up for failure and then work your way up from there.
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3. Saving Big
See how you can save in the bigger areas of your budget first. Several budgeters suggest spending no more than 25 percent of your monthly income on housing—unless you live in more expensive cities where your maximum should be 35 percent—no more than 10 percent on car payments, 5 percent for healthcare expenses and 10 percent for groceries.
4. Saving and Debt
Often overlooked when budgeting is putting enough money in your savings and enough toward your debt. Making these a priority can be a big lifesaver in the long run. Having plenty of money in your savings can significantly help you when something unexpected comes along later—huge medical bills, car repair, etc.—and putting more money toward your debt now will only free that allocated money up later after you have paid off that debt.
Along with putting money toward your savings, make sure you are putting an additional 10 percent of your monthly income—in addition to anything going into your 401(k) account at work—toward retirement.
5. Lifestyle Budgeting
Now we’ll start to get to more of the fun stuff. This will be further down your list when writing out your budget. Lifestyle budgeting can include vacations, new furniture, shopping sprees, entertainment, dates, etc. However, if you are far down in debt and have little savings, you’ll want to tackle those categories first—at least making good headway before you make these other categories. Even if you have little debt, your lifestyle budgeting category shouldn’t exceed 30 percent of your budget. You still have necessities you need to take care of first.
So how do you begin budgeting in this category? Make it personal. What areas make you most happy? Traveling? Working out? A hobby? Make a budget for it. Even if you’re limited in how much you can spend in that category, you’re still getting to spend a little in this area that brings you happiness! It might even make you a little bit more intentional about what you spend your allocated amount on.
6. Dining Out
Although this may fall under the lifestyle category, you’re still going to have a category in your necessities area for food. Many people dine out at least a couple of times a week—some even more than that. For tips on how to eat out on a low budget, see How to Dine Responsibly: Eating Healthy on a Low Budget.
