March 20, 2017

Personal Budget: Saving for the Unexpected Expenses

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Car payments. Rent. Groceries. If you have a good budget, all your expenses are accounted for. But all other unexpected expenses like car repair, family wedding etc throw you off your budget. All these expenses cumulate on your budget. Listed below are few of these expenses which you need to keep a track and make a budget.

There are plenty of mobile apps like Mint Budgeting App, PocketGuard Budget App, GoodBudget, Mvelopes & HomeBudget to help you track your spending in near-real time, so there are no excuses about being too busy.

· Car repairs - Minor or major accidents and gradual wear and tear on your vehicle can leave you staring, open-mouthed, at an unplanned bill in the hundreds of dollars. Prevent unnecessary expenses by checking your owner's manual and scheduling your car's recommended maintenance -- on time.

· Price hikes - Gas and insurance prices keep rising. You can't control the price of gas but you can shop around if your insurer is raising your premiums. Curb costs by carpooling to work and take up energy-efficient habits like not idling when you stop for that morning coffee.

· Job loss- Losing your job can be traumatic, but if you're in a relatively stable financial situation, you should be OK financially. While unemployed, keep your expenses to a bare minimum and, if you're even remotely concerned about your finances, look for a job ASAP.

· Impulse buying -  When the seasons change, we go shopping and follow through on whims, like buying yet another pair of shoes via a little credit card debt. Impulse buying is what gets most people into trouble. A detailed budget will keep your expectations reasonable. Know where that money will eventually come from -- like your holiday fund -- and those shoes will start to look less appealing.

· Hidden fees - Sales and "special" offers are everywhere -- right along with hidden fees and charges, whether it's credit card annual fees, or cell phones service fees. Don't be taken in by credit cards with 0% interest for the first six months -- most people don't switch to another card after that, and you may be paying high interest when the promotional period ends. Think long term. And ask salespeople about the total you will be charged, including all fees, not the special deal rate.

· Pet Expenses – Your pet’s illness comes not only at an emotional price but at a high financial one too. If you're worried all those medical expenses, consider investing in insurance for your pet. You'll still be paying to keep your pet healthy, but at least it's a planned expense.

· Illness - Dealing with serious sickness is often impossible to plan for you just need the money to have time off. You need three to six month's salary in a slush fund. It may be wise to save 5% or 10% of your pay cheque in savings each week. Doing so will keep you prepared for everything -- from a major illness to that ugly bridesmaid's dress.

It is within your power to control these budget busters, and it is up to you as to whether it is important enough to do anything about them. Make the right choice and enjoy the subsequent savings.

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