The New Necessities: Budgeting for Real Life

Advice & Stories, Budgets & Banking, Planning & Saving
on September 17, 2015
Budgeting for Real Life

Let’s get real. These days, “necessities” extend beyond food and shelter. Your day-to-day life requires the new necessities. What are new necessities? Internet, a mobile phone, running hot water, and a way to heat and cool your home to just the right temperature are just a few of the things we claim to require to live our lives they way want. But it’s important to remember—all of these wonderful services come at a cost. They’re called utilities.

Utilities can eat away at our budget faster than any other group of expenses. When it comes to utilities we tend to justify a lot. We “need” Internet. We “need” electricity. And because we are sure we need these things, we are willing to pay anything to get them, even if it eats up a huge percentage of our take-home budget. This just won’t fly long-term though. Limiting what you spend on utilities to 10 percent of your take-home pay is a much more realistic plan. You only get so much to live on each month, so take time to go through all your expenses and evaluate how much of your budget you are dedicating to each.

Electricity and Gas

Electricity makes the world go round, but it doesn’t mean you have to over-use it. You need to spend money on electricity, but you are in control of how much you spend. Start with shutting off the lights when you aren’t in a room. Yes, it’s elementary, but if you aren’t in the habit, you could be wasting money each month. It’s also worth it to transition to energy-saving light bulbs. One of the most difficult parts of budgeting for this particular category of spending is the inconsistency of the amount you owe each month. Some gas companies will allow you to switch to a budget plan to help you even out your bills each month.

Water and Sewer

Do you know what a sink aerator is? It’s just a small piece of metal that screws onto your sink faucets. Aerators incorporate air into the stream of water that comes out of your faucet. Sound like a recipe for frustratingly weak pressure? Nope. The pressure of the water stays the same, but you’re using significantly less water. They even have them for shower heads, which can result in a lower electricity bill because you’ll be heating less water. A small upfront investment in aerators for your faucets and shower heads could add up to some serious savings on your water bill each month.


You have a home phone, a smart phone for you, a smart phone for your partner, and a smart phone for each of your kids. It’s no wonder you spend hundreds of dollars a month on communication costs. No one is going to argue you should cut back to an un-smart phone, but there are ways to get your communication bill in check. While the unlimited everything plan is appealing, saving money by limiting data use is not only smart for financial reasons, it’s also a good lesson in budgeting. Give everyone on your plan a data budget. You can even create a game by offering incentives to those family members who stick to their data budget. How we communicate has changed drastically over the last 10 years, which requires a shift in budget priorities. If your phone bill is huge and you can’t cut back, then you’ll have to shift funds from other expense categories to make up the difference.

Internet and Television

Having internet at home is no longer just for checking email. It now connects our TVs, our phones, our thermostats, and many other “smart” appliances. Then there is the cost of watching TV. A television subscription can range from an expensive cable plan to cheaper internet streaming services. But don’t be fooled. You may be proud to be cable-free, but streaming service plans can add up, especially since you have to pay for the highest level of internet in order to stream them. Take stock of what you use, and if you can’t cut back, then you need to rope in your entertainment budget to cover the difference.

No one’s telling you to give up modern convenience or comfort here. But as always, the idea is to spend within reason, and stick to that budget!

Peter Dunn, aka Pete the Planner, is an award-winning financial mind who has authored five books, hosts the popular Pete the Planner radio show and travels around the country offering financial education. His signature wit will have you laughing as you learn. For more from Peter, visit

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