Welcome back to another week of The Teacher’s Salary series. Feel free to leave me a comment or send me an email if you have any suggestions for future topics.
Click HERE to see links to some of my previous posts from this series.
Kev and I are not strangers to the budgeting process. I’m actually pretty passionate about creating
and working a monthly budget. I’ve found
that if we don’t tell our money where to go, it will run out! About six months ago, I began to realize that we
did not plan well for some of life’s incidentals expenses.
and working a monthly budget. I’ve found
that if we don’t tell our money where to go, it will run out! About six months ago, I began to realize that we
did not plan well for some of life’s incidentals expenses.
Talk of a summer vacation would arise in our families
and we would look at each other clueless about whether we’d be able to pay
for one when the time came. Preschool tuition would be due
the next month and I had to scramble to be able to come up with the money because I had forgotten. Sometimes we’d end up pulling money out of our emergency fund to pay for car repairs. We were usually able to make it work, but it sometimes resulted in
anxiety, taking from another cash envelope, squeezing our budget even more to
be able to add in a last minute expense, or “borrowing” from our emergency fund
and paying it back later.
I finally decided that enough was enough. Rather than sit back and wait for these
expenses {sometimes foreseen and sometimes unforeseen} to come due, I decided
to start planning for them within our monthly budget. I wanted to be as ready for them as I could
be when they arose.
expenses {sometimes foreseen and sometimes unforeseen} to come due, I decided
to start planning for them within our monthly budget. I wanted to be as ready for them as I could
be when they arose.
Since we like to leave our emergency fund alone unless we
encounter a true emergency {such as loosing a job or a medical catastrophe}, I decided to start putting some
money aside in a separate bank account. We’ve recently started calling it our slush fund account.
encounter a true emergency {such as loosing a job or a medical catastrophe}, I decided to start putting some
money aside in a separate bank account. We’ve recently started calling it our slush fund account.
Our slush fund account is linked to our family’s checking account, making it easy for me
to transfer the money each month after we get paid. It’s not a no frills account, strictly for saving up for the incidental expenses that we know are likely to arise. If you feel like you might be tempted to
transfer money out of the account for other things, then you may want to
consider opening up a separate account at a different bank. Do whatever will help you be successful, even if it seems silly.
There is no way to predict every expense you will
encounter, which is why an emergency fund is so important. An emergency fund helps remove some of the
risk for when “Murphy” strikes. A slush fund account is different though. These are the expenses that will come
either once or twice a year, or the expenses that you know will come, but you just aren’t
sure when. Here is the list of our
incidentals that we’ve begun saving for each month {I may add in Christmas too}.
encounter, which is why an emergency fund is so important. An emergency fund helps remove some of the
risk for when “Murphy” strikes. A slush fund account is different though. These are the expenses that will come
either once or twice a year, or the expenses that you know will come, but you just aren’t
sure when. Here is the list of our
incidentals that we’ve begun saving for each month {I may add in Christmas too}.
– Preschool tuition
– Vacation/Trips to Mississippi
– Car repairs
– Home repairs
– Insurance premiums
Now that we’ve been saving for these incidentals for a few months and have even had to tap into our account, I wanted to share 4 benefits we’ve seen from saving for incidentals.
1. Less anxiety
I tend to be the worrier in our home and saving
for these expenses has helped me to feel more prepared. I don’t stress as much about what we would do
if/when something happens to one of our cars or if an appliance goes out in our
house.
for these expenses has helped me to feel more prepared. I don’t stress as much about what we would do
if/when something happens to one of our cars or if an appliance goes out in our
house.
2. We aren’t tempted to put it on credit
We are committed to staying debt-free and while
I know there are some times when it just can’t be helped, I like that we aren’t
even tempted to charge these expenses.
There’s no reason to charge them when the money is there.
I know there are some times when it just can’t be helped, I like that we aren’t
even tempted to charge these expenses.
There’s no reason to charge them when the money is there.
3. We don’t have to take money out of your
emergency fund
emergency fund
We had to make some pretty firm rules about our
emergency fund. We no longer touch it
unless a true emergency arises. Since we
know car repairs will eventually happen, we can’t justify paying for them with
our emergency fund anymore.
emergency fund. We no longer touch it
unless a true emergency arises. Since we
know car repairs will eventually happen, we can’t justify paying for them with
our emergency fund anymore.
4. We don’t have to tighten up our monthly budget
We no longer have to make major tweaks to our
monthly budget when these do occur. If
we have to take some money out of our slush fund account {which we did recently
for a home repair}, we just keep putting money aside until it’s been replaced.
monthly budget when these do occur. If
we have to take some money out of our slush fund account {which we did recently
for a home repair}, we just keep putting money aside until it’s been replaced.
It’s been such a relief to have a little stash set aside for some of the expenses that come up throughout the year. Just recently, we had to pay for a contractor to do a repair to our roof and for a mechanic to repair our SUV. The repairs were not cheap, but it was so nice to have the money in our account to pay for it and not have to derail our budget.
* * * * * *
Do you save for incidentals?
What tips can you share?
Linking up with:
Ruth for Thrifty Thursday
We do these things also, and in our case we also sit aside every month for extra groceries, and gifts for Thanksgiving and Christmas.. which helps us, factoring in even getting a tree… I am retired now,but when I was working as a School cafeteria worker, we got paid once a month, and non in the summer months… so staying on a budget is always wise and a big help,also if we got any income tax return we would use that for appliance buying , vacation, or eye exams and new glasses etc. or any pressing clothing needs…. we even budget for birthdays, scattering them between the 12 months so only 1-2 comes out of any months budget
Great ideas! We found that if we didn't plan for the "extras" that happened, we would always go over budget. It's worked out well so far! 🙂