But that NEVER happens! Plan for ExpectedUNexpected events on your monthly budget.

But that “NEVER” happens!!!

Yeah right! Seriously? It never happens? And yet….it did…and another thing that never happens will happen next month. And it will put the hurtin’ on the old bank account. Maybe it will wipe out your vacation savings or your car replacement money. New A/C, new fuel pump, trip to the ER, stolen bike, wedding on the other side of the world…fill in the blank. It will happen, are you ready?

“Yeah but, that only happens once every few years.”
Do you know how many things only happen every few years? About enough to have something that never happens happen every month. It’s your job to anticipate, plan for and stay ahead of these things. Why do these things that never happen always have a three or four figure price tag?

• That never happens
• That rarely happens
• I wasn’t expecting that
• We didn’t plan for that
• I didn’t know about that
• That wasn’t fair
• That was a surprise
• I didn’t see that coming

(at $100 a pop, that’s $800.) These thoughts only help us feel better about ourselves, rationalize the situation and explain away the blame. Or as a friend of mine recently put it (you know who you are!) these thoughts “justify” it. But the bank account DOES NOT CARE. Try using a few of those lines on the bank account and see if you can get some of that money back. (let me know if it works)

Why does it put the hurtin’ on? Because we didn’t plan for it. We didn’t give it its rightful place on the monthly budget. We need to expect the unexpected. If we at least admit that the punch is coming, we can plan for it and minimize the damage. We don’t need to know when it’s coming or from what direction in order to plan for it. If we don’t plan for it and get blindsided, it hurts. If we plan for it, we can brush it off and carry on.

Have I convinced you yet? Good, let’s fix it!

I suggest an “Expected-Unexpected-Expected” category on the monthly budget. What, What, WHAT!?!? Yes. Put a guard in place for these things that never happen. We have three lines in this category.  It looks like this:

• Unexpected #1_________ – $40
• Unexpected #2_________ – $80
• Unexpected #3_________ – $160

The total amount in this category is $320.  That’s a pretty big cushion between me and those unexpected events.  (Adjust the amounts for your needs)

When $80 or $250 worth of stuff that never happens happens, it’s covered.  If nothing that never happens doesn’t happen, I get to redirect that cash to the next most productive place. Easy & fun.

This is the monthly cushion. It does not roll-over and build up, (that is what the Emergency Fund is for) it re-sets each month and starts over. If something happens that is more than $320, I take the rest out of the Emergency Fund and then re-fill it ASAP.

-Derek