With Good Things



It’s been awhile since we set up our spending plan (aka “budget”). How has it been working for you? Mine has been been messed up lately due to some unexpected expenses and purchases. The good news about a spending plan, is that it’s all about SPENDING, so it’s okay if we need to spend a little extra money sometimes (especially if you’ve planned for it and have already saved up). Let’s look at a couple of common budget pitfalls and how to avoid them:

Annual Expenses
By now we should be really good at tracking our ongoing expenses (utilities, groceries, etc.). However, annual expenses, like property taxes, are another story. An easy way to plan for these is to take the yearly expense amount and divide by 12…then set aside that amount every month to be ready for when that expense is due.

Unexpected Expenses
Here is where a spending plan can get majorly derailed (like mine has this month). Who knew that the clutch would go out on the Subaru…the Civic would also need a new clutch (and a water pump, and a timing belt)…the Fit would need new brakes…and the Subaru would get a nail in a tire (resulting in the need for 4 new tires)–all in the same month?!?! Good thing we’ve been working on our emergency fund and had money on hand to pay for these expenses!

While we may not be able to plan for every unexpected expense, we can do a bit of planning: have an emergency fund/savings plan in place, and use past events/expenses to plan ahead. For example, the Fit lasted 4 years before having to replace the brakes. So I know that 4 years from now, I’ll have to dish out for new ones…

Be Flexible
Don’t be too restrictive with your budget or you may just give up on it. A spending plan can change from day-to-day or month-to-month depending on your spending habits and income changes. If you need a new pair of shoes this month, you can plan to spend less in another category to pay for them. Over time you may find that your original budget doesn’t work any more, so make sure you review at least once a year and make necessary updates.

I may be an affiliate for products I recommend, and I may receive a commission from purchases made through affiliate links.  I only recommend products I love and use myself, so I know you’ll love them, too!

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