How to Deal With Unexpected Expenses In Your budget.
Every month my husband and I sit down for our monthly budget meeting. Is it fun? Nope. Do I look forward to it? Big no! Do I do it anyways because I know it will save me money???? Absolutely!
The monthly budget meeting is the time for us to discuss the previous months budget. We go over what worked, what didn’t work and we put together a new budget for the next month.
Our budget is a zero based budget, meaning every single penny that comes in during the month is budgeted to a certain category. There is no excess. This not only helps keep us on track, but it also means we have to stick to what was budgeted, no exceptions!
We try to brainstorm every expense that is likely to arise over the next month. Sometimes, we forget something. And other times expenses arise that we had no way to plan for.
Take last month for example.
We had our budget meeting and thought we were entering the month prepared. A couple of week later we found out that we were going to have to pay $120 for my daughter to participate in track.
We had already agreed that she would be allowed to do track this year, we just didn’t realize how soon that fee would be due.
So, we went back to our budget and made it work. We were able to cut a few other expenses down in a different category so that we could come up with the $120. We have done this enough times that it’s become very easy and low stress.
If you are new to budgeting though, it might feel a little daunting when these unexpected expenses come. I’m here to give you some pointers and help along the way.
5 Ways You Can Prepare (or tweak) Your Budget for Unexpected Expenses
Planned Ahead for the Unexpected
It’s not a secret that unexpected expenses happen. So, it’s our job to prepare ourselves. Here are two ways you can plan for the unexpected.
An Emergency Fund is so important to have at all times. I can not stress this fact enough, if I could scream it from the rooftops…I would. Whether we like it or not, emergencies happen!
My daughters track payment was NOT an emergency. Make sure you only use this fund for true emergencies. There are other ways to deal with unexpected expenses than dipping into this important account.
I use to be one that thought we were immune to emergencies, and then one day my husband unexpectedly lost his job.
It was awful. But. The one thing that kept us going and kept me calm was the fact that we had an emergency fund in place. Having that emergency fund in place was one of the only things that kept me going. I had the peace that we would be OK.
I know that contributing to an emergency fund can be difficult…..especially when you have dozens of bills to pay, retirement to save for, mouths to feed, debt to pay off, and a life to live….I get it!
A few tips to help…..
Try saving just 2% of each paycheck. As it gets easier to do, slowly increase that percentage.
Set up a direct deposit.
Look into your bank to set up a direct deposit into a savings account (for emergencies only). This account should be separate from your checking account so it’s harder to use.
When you set up a direct deposit the money is automatically deposited into your emergency savings account from your paycheck (or checking account, depending how it’s set up). This way you don’t even have the choice to use that money for anything else. If you never even see it, than you won’t even miss it!
You need to include a Miscellaneous Category within your monthly budget. This category is meant for the unplanned expenses that come during the month.
We put $150 into miscellaneous each month. This money is used for all of the situations that arise, but weren’t planned for.
When my daughter came to us with the information that it was time to pay for track, we knew we could cover it with our miscellaneous budget. However, we also knew that we would need to watch our spending in the other areas to make sure that no other “miscellaneous” items arose.
Fixing Unexpected Expenses
Here are a few ways to make the budget work if you don’t have (or don’t want to use) money from your miscellaneous category or emergency fund.
If you find yourself over spending in a few of your categories put a pause on all unnecessary spending for the rest of the month.
This may include stopping things like going out to eat, going to movies or buying clothes. You might also want to limit your groceries, here are a few ways you can spend less on groceries.
This is not an easy adjustment, but remember it is only temporary.
Make Extra Money
If you need some quick cash, look into some ways to earn extra money.
Consider starting one of these side hustles that can be done from home.
Another way to get some extra money is to sell some items around your house. This is actually my FAVE way to fix the budget. All it takes is 5 minutes of taking pictures and writing a brief description of whatever you need to sell, and bam! You’ve made money!
Here are 5 Websites you Can Sell Your Stuff for Quick Cash. I prefer Facebook Marketplace, but I’ve used them all!
Take a look around your house to find a few items you haven’t touched for a few years (a basement storage room is usually the first place I look), and list that clutter for sale! If you need some ideas, I’ve got you covered, just check out my article: 10 Items In Your House You Can Sell Quickly To Make Money
Keep Stepping Forward
The most important thing is that you don’t discouraged when these unexpected expenses arise.
There are always be bumps in the road, but you can overcome every single one of those bumps. I promise!
No budget is perfect. Mine certainly isn’t! But. I keep trying every month to improve little by little. Learn from each mistake and keep your head up!
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