If there is one thing that will kill a saving and spending plan, it is unplanned spending. And if your saving and spending plan only has categories for everyday expenses, then unplanned spending is definitely going to occur. How are you going to pay for it?
Let's brainstorm some things that might not show up on a spending plan, but that might cause you to spend money.
- New hot water heater
- High school reunion
- Baby Shower
- Fender-bender
- First Date
- Dental Work
- Family emergency
- Bail (let's hope not)
- Once in a lifetime chance to do something
- Surprise PCS orders
I'm sure you can add some more things to list, and I'd love to hear them. The important thing is, you need to figure out how to you will deal with these unexpected expenses. If you have an emergency fund, great. Better yet, build the unexpected into your saving and spending plan.
Admittedly, some of these are more surprising than others. I do not have a bail fund in my savings plan, and I hope I never need one. However, I do know that hot water heaters will break, and we will PCS again, and that my high school will continue to have reunions every five years.
There are two sides of dealing with this issue. One is to figure out how to put unusual costs into your regular categories. High school reunions can go under entertainment, for example. The other is to have categories for things that can be somewhat anticipated, such as home repairs.
One of the most frequent reasons spending plans don't work is because they don't anticipate true wants and needs. While we can all survive on just food, housing and transportation for a short while, it is hard to forgo all other spending indefinitely. Preparation is key, and anticipation is the first step in preparation.
Look over your spending plan, and figure out some crazy scenarios. Hopefully that will inspire you to improve your saving and spending plan to prepare for those unexpected costs.
