Over the weekend my sister came into to town. I have seen my sister twice in two years. She lives in Minnesota so it can be tough for us to travel to her, or for her to travel to us. So seeing her is always special since I do not get to very often.
We met with my Dad and one of his friends and business associates for lunch at a place called Houston's in North Dallas. Houston's can be pretty pricy. I paid $14.00 for a club sandwich (even though they have the best club sandwhiches I have ever eaten). So I covered my sister, my wife and my meal and the total for this was $63.00 after tips. To me, this is a pretty pricy lunch.
Moreover, every paycheck I receive, I put 7% of it into my 401(k) plan and 10% in my high interest savings account at HSBC, for a total of 17%. I get paid weekly, so this amount tends to cut my paycheck down quite low.
I do not have an "unexpected" expense savings, other than my emergency savings, which technically is used for emergencies. So I had to use my budget money to pay for our meal with really sets me back on my expenses (i.e. being able to cover all my bills).
My budget is set so that every other week my bills get paid, and every other opposite week, those checks are open to either save from or use as "left over" to add to the next week's pay (if all that makes sense). This past week was a week where I had to cover bills so my "left over" was simply not there. This really puts me into financial "worry mode." So I was forced to pull out of my emergency fund to cover the costs.
There were other unexpected expenses that were included in this week that I have not mentioned here, so keep in mind that this one eating out event was not that detrimental, it was the other unexpected expenses added to this one that put me over the top. Space and time simply does not allow me to post all the extra expenses.
This makes me wonder if I should start a small savings for "unexpected" expenses, at least until I have several other credit cards paid off giving me more breating room in my budget.
Does anyone out there have any thoughts on this idea? Has anyone ever tried this? Please let me know your thoughts.
Tuesday, April 15, 2008
Unexpected Expenses and Saving Money
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3 comments:
What are you considering unexpected expenses? I have a "car fund" into which I put money every paycheck. This covers any car expenses other than gas (tags, insurance, maintenance). I also have a "fun fund" (allotted for gifts and travel). I also budget a specific amount out of each paycheck for miscellaneous (gasoline, lunch, whatever). Once that miscellaneous money is gone, it's gone. No more spending until my next paycheck.
savvy,
good question. Actually for me, car fund would be my emergency fund. We have a fairly large emergency fund - around $2000.00, that we use for house repairs, car break downs, and things of that nature - this fund is separate from our budget. When unexpected things come up - like a family wanted to do something spur of the moment, such as fly in and spend a weekend with us, this is what I mean - unexpected.
Based on this, I have revamped my budget to include a very small "unexpected" fund that has arounf 200.00 in it.
Of course, Todd! Having a fund for unforeseen expenses is always a must. There should be flexibility in your budget so that you won't be stuck with the same thing every month. Savvy presented a great idea, which is the fun fund. Unexpected spending shouldn't always be about serious stuff! Btw, $200 is a tad small for that. I say make it half a thousand!
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