How to Budget for Unexpected Expenses
Sigh. Unexpected expenses. They’re just so…unexpected. Storm damage. Car repairs. Sports fees. The list is long, and goes on and on. While you can’t predict what these costs are or how much they may be, you can prepare for them. Here are some pointers.
MAKE A PLAN
Make a list of the most common unexpected expenses. Try to make it centered around predictable events on the calendar. Birthday and Christmas gifts. Property taxes. Winterization of your vehicles. Even routine Doctor, Dentist and Eye Doctor visits. What times of the year are you most likely to spend more than your typical budget?
MAKE A LIST
So here’s the not-so-fun part (that you’ll thank yourself for doing later). Look at your bank account and credit card statements from the past year to find your unexpected expenses. Tally them up. The number may be unpleasantly high, so be sure you are seated and comfortable.
MAKE A BUDGET
So you have the total cost of your unexpected expenses. Now divide that by the number of paychecks you have in a year (i.e. if you’re paid bi-weekly, divide it by 24). This will give you a baseline of how much you should set aside for unexpected expenses per paycheck. Also, we suggest rounding up, so if it’s $91.50, set aside $100.
MAKE AN ACCOUNT
And here’s where we come in! If you’re ready to set aside money, we have plenty of options available. Contact us and let’s figure out what account works best for your goals.