Thursday, November 02, 2006

 

Oops, I need an Unplanned Expenses Fund Too?

I've been so proud of myself for doing our budget every month and tracking all our expenses, and pretty much staying close to budget, but we really blew the budget in October and it was all due to unplanned expenses: vet bills, doctor bills, new winter shoes and jacket for bf, and a shelving system for the utility room. I didn't deem any of these an emergency so didn't use the emergency fund to pay for them. Which meant I had to charge them all, eek! I completely plan to pay them all of before the end of this month so I'm not too worried, but now I realize that in addtion to an emergency fund, I need to have a fund for those non-emergency expenses that you have to charge because you don't have enough cash on hand.
 
First I'm going to make a list: unplanned unknown expenses, planned expenses with no timeframe (such as the utility room shelving),  holiday/birthday expenses. For example: clothing, vet bills the cat fund can't afford, doctors bills, tax bills (?), car repairs/maintenance, new appliances, etc.
 
Then I will research costs based on my previous purchases or use the internet to determine how much unplanned expense money I should have. And lastly I will fund it asap meaning I am going to channel my monthly emergency fund allotment into this then go back to finishing my emergency fund. Or maybe I should finish funding the emergency first and then do the unplanned expenses???
 
 
 
 

1 Comments:

Anonymous Boston Gal said...

Hi Kassy,

Ah, the spending account! Yes, right behind an emergency account the spending account reveals itself. My suggestion would be to fund the spending account and then build back the emergency account. You are 100% assured of needed the spending account if you are using it to plan for Christmas and other giving spending, automotive repairs, household improvements and repairs, etc.

The emergency fund, while incredibly important, is unlikely to be tapped in the near future.

Once the emergency fund is back to healthy levels revisit your spending account. This account might someday be used to purchase a new car or other more long-term spending (furniture, big vacations, etc.) Basically any big ticket purchase that might otherwise have to be financed should someday be covered by this fund - at least that is my ultimate vision for my spending account.

Good luck!

9:22 AM  

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