“Budgeting for Unexpected Expenses,” Ensign, Apr. 2008, 74–75
As I counsel and educate individuals about using a budget, I find they often struggle with three stumbling blocks. But I quickly reassure them that there are solutions.
• Irregular expenses. Car registration, insurance, birthdays, holidays, anniversaries, and school expenses are all examples of irregular expenses—something that you know about but that don’t occur every month.
Solution: Establish a revolving savings account. Start by listing all irregular expenses. Add them up for the entire year and divide the total by 12. This will give you a set dollar amount to include in your monthly budget. A good place to keep this money is in a basic savings account. You can even create an automatic withdrawal from your checking account to be deposited into your savings account. This process transforms irregular expenses into one regular expense.
• Large, unexpected expenses. A car repair, an extra medical bill, or a broken appliance are some of the many possible budget wreckers.
Solution: Create an emergency fund. This will also help if you experience an unexpected drop in income. Though the potential unexpected expenses can seem overwhelming, try to decide how much you can realistically save each month. Even if it’s a small amount, commit to that goal. It will eventually add up.
• Small, unexpected expenses. These might include children’s school expenses, a donation to a fund-raiser, or a wedding gift.
Solution: Create a miscellaneous category in your budget to fund such expenses.
When we do our part, budgeting stumbling blocks, such as these, don’t have to be permanent. Though we cannot foresee all possible financial obligations, we can show the Lord we are wisely using the resources He has given us.