Photo by: silent-shot

It rained all last week here in the AZ, and the wife and I passed our fair share of accidents on the road.

Coming from a slightly wetter climate than my wife, these sightings often lead to short conversations between us about driving habits between different states.

The thought I always seem to return to is that when roads are wet they play a trick on you.

Most of the time you feel just as in control as you are on a dry road, and most of the time you might be. But it only takes one awkward puddle, or slick spot, or glare (or another bad driver) to take that control away. And on a freeway that’s all it takes.

The best thing, as most people know,  is to simply give yourself a reasonable buffer between you and other cars.

Some months, for my family,  it’s tempting to live right at our means, or even beyond – but it’s just like hugging a car on the freeway. Most of the time we’ll get through the month just fine, but it only takes one instance of “life” to take that control away.

Try to live within your means and give yourself a bit of a buffer. The more you save each month, the safer you’re driving. You may run into heart pounding situations (that may leave you using colorful language), but you just might have enough room to avoid an emergency.Similar Posts:

My Awesome Nephew

A little early for a Christmas picture, isn’t it?

Well, that’s actually the point today.

Last week I wrote about Budgeting for Expected Costs, and my little sister (who, on a side note, is a thrift store ninja master) brought up that the holidays are a perfect example.

Most of us are planning on spending at least some money for the holidays. (Wordy debates of how right or wrong this is can be found all over the internet if you want to join one.)

Now is a great opportunity to start building funds in your budget for trips back home, gifts, parties, home-made-gift materials, ugly sweaters, Pink Nightmares – anything you and your family might do to celebrate in your own way.

You can make categories – as general as one big “Christmas” category, or as many specific categories as you might want – and fund them as money comes in, or move funds in them from less important categories for a while. The more funded they are, the less inclined you might be to go beyond your means this year – and the less guilty you’ll feel when you find the perfect gift.

How do you use your budget when the holidays start?Similar Posts:

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Photo by: Nicholas T

Budgeting Your Income for Upcoming Expected Costs

It’s getting colder outside, which always reminds me that time marches forward regardless of how fast or slow it might feel sometimes.

Is your roof going to need some love next year? Do you know you’ll have to upgrade your computers soon? Do you pay your insurance twice a year?

When you’re expecting expenses, they can sometimes feel like a ticking time-bomb in your bank account.

If you’d like to get rid of some of the anxiety that comes with knowing you’ll have to pay for something soon, you can easily use your budget for what I call “intermediate savings.”

If you have a rough idea of how much you’ll need in a few months, or a year, simply break that total down by month and stash that amount away in a “Roof,” “Computer,” or “Insurance” category on your budget each month.

It’s a pretty simple way to get rid of that doomsday stress – and when the day of reckoning comes, you’ll be glad it’s there.Similar Posts:

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Inconveniences suck, but they’re better than emergencies. Being stuck in traffic, for example, is worlds better than being in an accident.

Last year our car had some problems with its struts (yuck) and we had to fork over a lot of money to keep it functioning.

Was it a punch in the gut?

Yes… yes it was.

photo by me!

But was it a financial emergency?

Not this time.

Every month we had been adding a little money to our Short Term Savings on our budget. When the situation came, we had enough to cover it.

And if we’d hadn’t had enough in that fund yet, we’d have known exactly where to have taken money from – our least important wants – all organized in our budget. Everything was in order, and we were going to be fine.

Things like this happen to everyone, all the time, and they often come in groups. Unexpected expenses are part of life. Unfortunately, none of us are truly immune.

Expect them and get through them.

This situation had the potential to be more than an inconvenience – it easily could have put us behind on bills or other important needs. But by having a small fund in our budget for “life,” we turned it into an inconvenience. We paid cash, felt sick to our stomachs for a while, and slowly built our short term savings back up.

Make sure your budget has a category for short term savings (you can keep it in a simple savings account if you want) and add a little to it each month. Even if it’s only ten bucks or so, get started!

And when life happens, instead of panicking (or borrowing), brush yourself off, let out a heavy sigh, and start your short term savings over again. Turn your potential emergency into an inconvenience.Similar Posts:

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