Dear Smart Money People,
Have you ever had this happen? You have a budget, it is pretty detailed, and you feel good about it. Then your kid comes home and decides he wants to play tennis this spring to the tune of $225. Not in the budget. What do you do?
Or your best friend wants to go on a girl’s weekend or your buddies want to go motorbike racing or play golf at an exclusive club. The point is an unexpected expense comes up. So, what do you do?
You be FLEXIBLE. Budgets are meant to be fluid documents not ironclad contracts with no room to move or shuffle.
When things come up for Bill and me, the first thing we look at are the budget items that are variable like clothing, entertainment, or the miscellaneous category first. Could we move $100 out of entertainment toward Tennis Registration? Could we use $80 from clothing to cover the cost of tennis shoes and the uniform? Miscellaneous is just the category to help out with these unforeseen costs but it is not a huge line item and would only be able to support half the expense of spring soccer. We could pull $45 from there and all in, we could cover the $225.
The point is, clearly you need a budget, but you need to be flexible and fluid with your budget. Some months you will be on target and stay on track. Some months, stuff happens. That is LIFE. So, revisit your budget and the categories that have some wiggle room in them.
Another good TIP is in the months you don’t spend all the money in your variable categories, for example, clothing or entertainment, tuck some of that aside to a wiggle fund. Move the rest to savings. Having a little room for life makes life a whole lot easier.
Typically, in January and February, we don’t spend a lot on clothing. Christmas was just in December and usually, Santa was generous with new clothes. Bill and I are able to move that money into savings and then when an unexpected expense comes up, we know we’ve lived below our means, even with our budget, and we don’t sweat it!!
I hope this was helpful.
You’ve got this!!
Firmly planted in your corner!!
Karen & Bill