5 Tips to Prevent Unexpected Expenses in Your Budget
Monday, September 22, 2008
It's impossible to predict all of the expenses that you will encounter in a given month. This is why so many people quit budgeting, because they get frustrated when it doesn't go the way they planned it. Budgeting does work, and it's the only sure fire way to become wealthy over a long period of time. In order to avoid getting frustrated over the unexpected expenses that you encounter every month, spend a few hours brainstorming and researching the expenses in the past that have broken your budget. Then, write those expenses down in their own categories. Now, start setting aside a separate amount of money in your monthly budget for those unexpected expenses. Here are five unexpected expense categories that you may want to start setting aside money for: Car Maintenance: maintaining your car is inevitable. If you don't have a budget category for your car, then you need to put one in there today. You may not use the money every month, but carry it over to the next month for upcoming repairs and maintenance. Look at your car's recommended maintenance schedule and repairs to be made based on the current and future mileage. This will give you a better idea of how much to budget, and don't forget maintenance items such as changing the oil, tires, and brakes.
Travel: Do you have an elderly family member close to you? Do you have a child away at college or a child about to have a grand baby? Sometimes, making an unplanned trip can break your budget, and you have no time to waste to save up the money. If you find yourself going away for the weekend unexpectedly quite often or circumstances in your life or a family member's life might cause you to travel in the future, put together an "unplanned" traveling budget.
House Maintenance: I used to work as a claims adjuster, and everything I inspected was residential property damage. I was amazed at the lack of maintenance from many homeowners. They had no pride of ownership. Their biggest investment was losing value, and it could have easily been prevented. Many people buy a house, and think that's it. That's just the beginning. Maintaining a home is a constant battle for a homeowner, but it's worth it, because houses go UP in value over a long period of time. Real estate is a great investment so make sure you are setting aside money each month for routine maintenance and unexpected expenses such as a water heater, roof repair, electrical work.
Medical Costs: Do you have a high deductible? Do you have a child with special medical needs? You may need to keep a certain amount of money set aside in your emergency fund just for extra medical expenses. Medical bills are one of the most common reasons that people file for bankruptcy. It adds up quick. Safeguard yourself from bankruptcy by always thinking about medical care and unexpected medical costs.
The Nuisance Category: This category is completely made up by me, but hear me out on this one. Everyone comes across little nuisances in life that cost me. It could be a speeding ticket, going over on your cell phone minutes, bank fees, or a loss assessment from your homeowner's association. Whatever it is, it fits in this category if it's something that really ticks you off knowing that you must pay it. For those of you that live on a tight budget or your trying to get out of debt, these little nuisance expenses can throw your budget out of whack.
These are just a few categories, but you can probably think of five to ten more unexpected expenses that you've encountered in the past year. The point is that when life throws you a curve ball, you don't have to strike out. Be prepared and hit a home run with your finances by preparing for life’s unexpected expenses.
Tips courtesy of PeopleJam.com, an online self-improvement resource.
Labels: budget, home, organization
posted by The Mom Salon Editors @ 3:00 AM,
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