In this 2 minute Q&A, we’re going into why I have a problem with the miscellaneous budget when it comes to unexpected expenses. As someone who’s taken advantage of this budgeting tip to hide my overspending, we honestly need a better solution. Having the flexibility to categorize all of my extra wants under miscellaneous, lead me to go into credit card debt and drain my savings. Leaving me unprepared for any unexpected expenses that weren’t emergencies. So what options do we have to better prepare ourselves for small unexpected expenses outside of just a miscellaneous budget?
Miscellaneous Budget Hack
Now, if you want to use a miscellaneous budget as a quick fix for unexpected expenses you can. But first, ask yourself these questions:
- What would you use your miscellaneous budget for?
- Are these small expenses something you can plan for or are they truly unexpected?
- Are these unexpected expenses wants or needs?
Once you’ve answered these questions, you might wonder if you could better prepare for these types of expenses? If it’s an emergency, you probably should use your emergency fund. But if it’s a spontaneous purchase like a candle or a cute top, then you could add that to your play money. You need to find ways to stop hiding your wants within miscellaneous expenses so that you can budget appropriately. But the big question is how do manage unexpected expenses that are needed, but not an emergency? Like if you need to buy Tylenol for your child who has a fever or increased gas prices? That’s where the first aid kit comes into play.
First Aid Kit
The first aid kit for your budget is simply a small buffer that’s only for unexpected needs that aren’t emergencies. But to protect your first aid kit from being used to hide overspending, as I did in the past, I made some rules.
Rule 1: The $100 buffer is for unexpected expenses that you need, not want.
Rule 2: Only replenish what you use and roll over the unused money towards next month.
Rule 3: The expenses can’t be pre-planned. Because if it can be planned, then you could just budget for it.
Depending on the size of your family, $100 has been a good amount of a buffer for us. What I love about the First Aid Kit is that it allows us to not increase our monthly budget like our miscellaneous budget use to. Instead, it’s a more dependable buffer that I know if there if I need it. My First Aid Kit lives within your bills account of the High-5 Banking Method, which reminds me that it’s only for necessities and not wants. But, if $100 is not enough, make sure that you review the nature of the unexpected expenses. Because the last thing you want to do is increase your cost of living and get into a routine of not planning your expenses.