$avvy $undays #5: Budgeting the Unexpected because Sh*t Happens All the Time

Food, entertainment, phone bills, rent/mortgage – these are some of the things that we can easily plan and budget for every month, and even several months in advance. Of course, we don’t usually budget to perfection – so I always add a margin of safety to my budgeting. So assuming that I need S$80 for my phone bills every month, I will put aside S$100 – just in case I incur additional charges like I sometimes do by going over my data limit.

Then there is another “contingency” planning, or for a “rainy day” – planning for things that you kind of expect may inevitably happen one day, just not on a regular basis and you’re not quite sure exactly when it will happen. Such as a new laptop when the current one suddenly goes kaput, or emergency medical expenses. Or car repairs and fines. Or extra vacations. So I always leave a little extra amount that accumulates for these big ticket items that may someday occur.

But even with my “contingency” planning – and my fiance likes to laugh and say that “you have a contingency plan for your contingency plan” for my budgeting, the fact of life is that shit happens all the time – and suddenly, every month there seems to be some unanticipated yet unavoidable events, and all that “rainy day” savings are just not enough! Plus I have specific needs assigned to those “rainy day” savings so I don’t usually like to touch them every month.

Take for example, dental work – I once went for my regular dental checkup and came out with a S$1000 bill to repair 2 teeth that I didn’t even know had problems! It was nowhere on my “rainy day” scenario; I thought that I’ll be able to cover that up by dipping a little into my “rainy day” savings, but the following month I had an interview and needed a suit so there goes another S$300. Then the month after that I had to attend a wedding – which means another S$200 gone. And so on…

It just seems that every month, something will crop up that fits nowhere into my “regular spend” or “rainy day” scenario. I think having a “rainy day” savings is just not enough – I am adding another “shit happens” budget in my budget plan. How do you deal with such “Unexpected Expenses”?

Image Credits: frankleleon


4 thoughts on “$avvy $undays #5: Budgeting the Unexpected because Sh*t Happens All the Time

  1. Gosh, going through this now with my husbands best friends wedding. I was asked to step in for a sister of the bride so between the dress, shoes, bridal shower, wedding gift, my husbands suit and so on I’m about ready to crawl into a whole. Sadly, my version of “dealing” is putting it on a credit card. But! I have a plan. Number 1, my credit card has rewards so I’m getting 5% back on my purchase. Number 2, I’m working a little overtime to pay off said credit card a little faster. Number 3, I’m cutting monthly costs by making SURE that I stay under phone data limits, taking shorter showers so the water bill is lower, keeping the air a degree higher to save a bit there, and making coffee at home so I’m saving $3 a day not buying it at work. And then number 4, what better time is there to start Spring cleaning!? Have a garage sale and make some extra cash… post gently used clothing/purses/jewelry to sites like ebay, and if you are crafty make some stuff on the side and sale it on sites like Etsy 🙂

    • Wow, you’re also a “contingency plan for the contingency plan” kinda person like me! 😀

      Heh, I’m actually a supporter of using credit cards – but only if I can pay it off at the end of every month! Otherwise the interest charged on it (last i checked it was over 20% per annum) will more than outweigh the rewards they give…

      definitely gonna try doing more of number 4. i used to sell a lot of my old stuff online but the income is pretty “lumpy” – the cash never comes in when I need it, and then suddenly i get lots of sales when im not in need of the money!

      • Oh you’re so right about the sales online but if you have a paypal account I find it’s a great place to save money. All my sales end up in there and then I use that account to pay for shipping and fees from the sites I use. Then I just let it all sit there and build up until I need it. I’ve literally bought the bridesmaid dress that way this month 🙂 Totally agree about the credit card and paying it off before the end of the month. You don’t want to depend on your credit card, but it’s a good thing to have if you have NO options… aka car breaks down and you have to get to work but can’t take the bus cause you life in BFE.

  2. What you need is an Emergency Savings account. Use it for true emergencies like car repairs or an emergency room visit. Start small with a goal of $1,000 (that should cover most repairs and minor medical emergencies) and then grow the account until you have 3 to 6 months worth of your expenses covered. Long term, you will want to be able to cover a job loss or longer hospital stay and the resulting loss of income.

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