Often the things we did not intend to happen to us always end up happening anyway. Our cars always break down, our friends always expect gifts during their birthdays and major holidays like christmas, electricity bills always find a way to increase no matter what we do avoid it, our houses always cry for repairs in one way or another and so many things that were not planned for always find a space in our lives. It’s funny huh? These are what we call unexpected expenses or whatever term you may find appropriate. These expenses if they are not planned for can end up messing the plans we had with our money and even end up eating into our budget. With a plan therefore you will be ready for whatever you did not plan for as you shall have anticipated in advance. So how do we go about making a plan to beat our unexpected expenses?
1. Identify your unexpected expenses
You will be asking yourself how can I identify what is unexpected? You will agree with me that in your life year in year out there are always common culprits that always find a way to have a share of your hard earned money. Car repairs, house repairs, increased electricity bills, high heating water bills, medical expenses just to mention a few. Identify and list them to enable you to plan for them. We always hope that bad things don’t happen to us and even pray against them seeking God’s intervention but they still happen anyway. Beat that denial that bad things won’t happen to you and anticipate. That way, when they end up happening you will be ready.
2. Review your previous year budget
After identifying your unexpected expenses you need to sit doen and have a good look at your previous year budget to know how much more did you spend that you did not intend to spend. Check for the extra amount of cash you spent but did not budget for. The purpose for this exercise is to have a rough idea of how much you need to set aside to address your always recurring issues that are strangers to your budget but still get away with your money.
3. Set up an emergency fund
This is a statement that you have heard maybe a million times in your entire life but there is a reason why you’ve heard it that much, it is because it is important and for your own good. For that reason I’m going to tell you again; set aside an emergency fund. This is where the cash you are going to use to address your unexpected expenses is going to come from. With this cash you will not have any reason to get some money from your pocket to address such issues. Isn’t that a great idea? So if you do not have an emergency fund make an effort of having one.
Always bear in mind Randy Pausch wise words on preparation;
Another way to be prepared is to think negatively. Yes, I’m a great optimist. but, when trying to make a decision, I often think of the worst case scenario. I call it ‘the eaten by wolves factor.’ If I do something, what’s the most terrible thing that could happen? Would I be eaten by wolves? One thing that makes it possible to be an optimist, is if you have a contingency plan for when all hell breaks loose. There are a lot of things I don’t worry about, because I have a plan in place if they do.Randy Pausch