Unplanned Expenses

It's that time of year again- back to school!  It seems like every week the kids are bringing home unexpected or forgotten fees related to school.  If while planning out your budget for the month you forgot to include room for things like this, you may be tempted to throw your budget out the window and give up.  Resist this urge to give up, because until you are practiced enough to remember all those little budget gotchas, you'll have to reshuffle things a bit.  If you don't have the money in an assigned category you'll have to borrow money from a few different categories to make up the difference.  This is of course an emergency stop gap, not a way of life.     


I have suggested in the past, especially when you are new to trying your hand at budgeting, to make sure you include a miscellaneous category in your budget.  The point of this category is to catch any small unplanned things that come up during the month- gifts, activities, fees.  This is usually $15-$50/month depending on your needs and your income.  Any amount more than this, in my opinion needs to be given to a specific category.  Whether you keep this money in cash building up in an envelope or put it into your non-monthly expense savings account, make sure you assign it somewhere so it doesn't get lost with your other money.  As you get your budget more fine tuned the need for this category will diminish because you will assign the money to more specific categories.  


You might be asking, "well, this is all good and fine, but what do I do if I have an expense come up that is more than my miscellaneous budget?"  Sometimes this happens and at that point you need to assess the situation.  If it's a considerable amount of money, like an unexpected car repair or something like that, then it may be necessary to tap into your emergency fund if you can't cash-flow the expense until payday.  If it's not a true emergency then borrow from other categories like I've already mentioned and put into practice a method to avoid that next time.  A good idea if you have school-aged children is to start a school category in your budget.  This would include school lunches, fees, field trips and anything else related to school.  Any unused money would roll over to the next month.  I know these are really simple steps to take but they make a huge difference in the long run and will save you that last minute headache of scrambling for the money.