Home Budgets Can Be Thrown Off by Both the Expected and the Unexpected
If there is one thing that can cause tremendous damage to our finances, it would have to be irregular expenses. These expenses do not happen every pay period or every month, but they often come up at some point during the year.
That may seem odd when you first look at it because we can, in fact, prepare for these costs. The unfortunate fact, though, is that the majority of us do not plan for them at all. Like those emergencies that often blindside us, these bills also catch us off guard. They sneak up on us, and we find ourselves in a financial dilemma when it comes to figuring out how to pay them.
Let's review a couple of the more popular irregular expenses. Since a lot of problems with home budgets happen during the holiday season, let's start off with the major expense involved in gift giving.
Gift giving
Every year, people go into debt because of the holidays. The spirit of the season takes hold of the checkbook, and, before you know it, we are spending the entire new year paying off credit cards.
I am going to share a secret with you. It is really important that you get this. If you need to save this article for a reminder, please do so.
There are very few constants in my life, but there is one thing that I have noticed: there has never been a year when Christmas did not fall on December 25. I think I may be able to predict that Christmas will fall on December 25 again next year. Don't quote me on it, but I just have this feeling. As silly as it may sound, it amazes me how many people are out on December 23 and 24, pushing and shoving their ways through the stores, buying last-minute gifts.
In that same respect, I will never forget those 31 hours over 2 hot June days that I spent in the hospital waiting for my daughter to make her debut. Most mothers that I talk to have fond memories of their delivery-room experiences. Yet, parents scramble at the last minute every year, trying to put together their children's birthday parties.
I cannot understand the undue stress that many of us place on ourselves when shopping for Christmas and birthday gifts. There is a simple solution: plan ahead. If we start preparing for Christmas and birthdays right after the last one, we actually have 12 months to plan and get everything right.
For example, if we want to spend $600 on gifts, then we know that we should be putting $50 each month into a gift envelope. Then, as sales and gift ideas pop up throughout the year, the money is there to take advantage of the opportunity.
Expenses for the home
A second major irregular expense revolves around the home. Whether you own or rent, there are always little things that come up.
For homeowners and renters alike, appliances and furniture may need to be replaced at some point. Repairs and upgrades may need to be done. These can be major budget breakers if not planned in advance. Any of these expenses can possibly take a whole paycheck and set us back on our other normal monthly expenses.
If you know that you would like to replace the furniture or appliances, start putting money away each month toward that goal. If you plan to spend $1200 on new furniture in four months, then plan to set aside $300 per month prior to the purchase.
The best way to avoid being thrown off course is to turn the expected but irregular expenses into regular monthly expenses. Add them to the monthly budget, and set money aside every month until the funds are actually needed.
Turning these irregular expenses into regular expenses will not only enable you to stay on budget, but it will also keep you from accruing interest on a credit card as well as keep you from adding another bill to your budget.
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Ozeme J. Bonnette is a financial coach, speaker, and the author of Get What Belongs to You: A Christian Guide to Managing Your Finances. She began her career at Merrill Lynch, and now works to increase financial literacy. She teaches and speaks to groups and organizations throughout the U.S. She earned 3 Bachelor's degrees at Fresno State and an MBA at UCLA's Anderson School. Find her online at http://www.thechristianmoneycoach.com .
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