The Struggle of Sticking to a Budget When Life is Unpredictable
Sticking to a budget can be one of the hardest things for us when their lives are unpredictable. One minute they might be doing great and the next they might have an unexpected expense pop up and ruin everything.
If you’re anything like me, if you are hit with an unexpected expense or something that prevents you from saving what you planned, it can make me want to just go and spend more money! Like, what’s the point of trying so hard if you now have this big expense to pay? It’s so hard to try and overcome that mindset.
There are many things that can cause you unexpected expenses, such as:
- car fails it’s MOT
- you forgot your insurance was due
- vet bills
- boiler breaks
- other home/car costs
- replacing broken tech
- speeding or parking ticket
- having a baby
- dentist costs
It can be so frustrating to be hit with something you weren’t expecting!
5 Tips on How to Stick to Your Budget When Life is Unpredictable
Here’s how to stick to your budget in the face of any curveball that life throws at you.
1. Start an emergency fund
Building up funds in order to provide yourself with protection against any unforeseen event is one of the best things you can do. This fund should be accessible and liquid enough so that funds can be accessed quickly if necessary.
Ideally, your emergency fund should be able to cover all your living expenses for 6 months. In the event of an unforeseen circumstance, such as sudden illness, injury, or illness, an emergency fund can help you avoid going into debt. By having money in the bank, you will not have to rely on credit cards or loans that may have high-interest rates and therefore increase your debt.
This does take some time to build up so remember that any amount is good! We all start somewhere!
2. Start a sinking fund
I have a sinking fund on my Monzo account. You are able to make ‘pots‘ and put money in different pots. This allows you to PLAN for things such as your car insurance being due, Christmas and birthday. It’s also good to have a bit of a ‘misc’ section of a few hundred pounds just in case.
Here are some of my pots:
- Car insurance/MOT/maintiance
- New laptop
I have money put away for any of these things and it means I’m never worried about upcoming events. If I ever plan to do something, like a weekend away, I just make a pot for it and put a bit in each month.
3. Establish credit
Now, for me, using credit is a last resort. But there may be times this is unavoidable. Establishing credit allows you to take advantage of credit cards and other financing options when they arise and provides a personal history of borrowing and repaying money
4. Write Down All Expenses and Keep Track of Them
There are many types of expenses that exist in the world today. Examples include groceries, fuel for your car, and utilities. The list goes on and on with expenses from different areas of our lives.
In order to make sure you are paying all your bills and staying on top of your finances, it is a good idea to keep a record of all the expenses you have made over a given period of time.
I just have my in a spreadsheet on Google drive. I have a tab for each month and it allows me to see what’s planned for each month.
5. Allow yourself a budget each month for unallocated things
Giving yourself a set amount of money each month is a great way to offset some unexpected spending. For example, I have myself £350 a month to spend on what I want. Most of the time, I don’t spend it and I just put it into my emergency or sinking fund at the end of the month. But it means having some funds if I need something unexpected.
Things like if we decide to go out for a meal or I need some new clothes. It allows me flexibility. I do not spend this money for the sake of it though! As I said, I will save it if I can. It’s just there if needed.
Sticking to your budget can be difficult, but it does not have to be. Finances are important and it is worth taking the time to make sure you are staying on track. If you’re looking for some general tips for sticking to your budget, read this article.