Budgeting abnormal expenses?

[Frügal]

The title may sound strange, but I couldn't think of how else to put it. Haha!

Anyways, here is what I am talking about...

Okay, we have a savings fund for Auto Expenses (that include normal maintenance like oil, tires, etc.). When it comes time to use that money, we move it to checking, and then... what? Just create a budget (on your spreadsheet or whatever your use) for that month alone?

What about unplanned purchases? We had to use lockout assistance the other day. $71. It gets reimbursed by State Farm, but they mail a check out after you deliver the receipt to them. We still have not gotten the reimbursement check, so it is an expense weighing down our checking. How do you budget that? Currently, it's just sitting in 'Other', unbudgeted.

I ask, because these unbudgeted categories are what have been killing us. I want to get them under control...

[woodie96]

If these unbudgeted categories aer killing you I would suggest looking at what you have spent on the uncategorized items, and see if you can group many of them into a category and budget it from there.

[jpg7n16]

I have a category for car maintenance - which I use to include oil changes, tires, inspection, registration, tuneups, brakes, etc.. I'd run them both through there. And when I get the rebate from State Farm, I'd run a negative expense through the same category

so

Car maintenance:
Oil change: $30
Locksmith: $71
Locksmith (rebated): ($71)

Total: $30

[cypher1]

Have you looked at AAA Road Service? The annual fee is around $60, and covers towing, lockouts, and I think even flat tire/spare swapping. Even if you're the passenger of another vehicle and it requires service, it will apply. However I believe there is a limit each , to prevent abuse. I currently use this option, but the free tows only over up to 10 miles, and charge extra for further distance. There is another option that covers unlimited distance, but more expensive.

[skydivingchic]

I use an electronic envelope budgeting system. So every month I put aside a set amount of money for irregular, variable expenses such as auto maintenance. That money just sits and builds up in the auto maintenance envelope until I need it. So many months, there is $0 spent from that envelope. Then another month when it goes in for service or needs repair I might spend several hundred dollars from that envelope. The month to month budget stays the same, however. I always put a set amount in that envelope every month. This category in particular it took me a while to nail down how much I should set aside each month, but once I got things tweaked just right it has smoothed out cash flow and budgeting tremendously.

I have sinking fund envelopes for many of these types of expenses - gifts, supplies and vet care for my cats, medical expenses, etc. I also have a miscellaneous category which I put some money in each month for random, one time type expenses that seem to pop up, like your lock out service example. You could do the same and then evaluate each expense that comes out of there - sometimes they aren't really miscellaneous expenses. They are things that could reasonably be expected to come up again and may warrant their own category. Other times it is just a miscellaneous expense, and there is no need to make a whole new category.

[Frügal]

Hmm. So, I guess, just ADD that category to the budget whenever money is spent in it...

[kork13]

I budget every month for the random expenses... I categorize it as "slush money". Life happens, and invariably something unexpected comes up every month. So having a generalized "other" section allows me to account for that very easily. Of course, that assumes that you even need to account for it... I'm to a point where I know what my monthly ongoing expenses are, and anything beyond that is "unexpected." Thus, if it can't be covered by the allotted slush money, it comes from my general savings, which were set aside in previous months for generalized future use. Hopefully that makes sense... I think of it as if I already accounted for the expense when I set the money aside in savings, and the expense becomes transparent to my current month's budgeted expenditures.

If you're tracking all of your expenses in order to determine what your monthly expenses are, then it could be a little more off-putting... But again, you might consider just labeling it in a category for "The Unexpected", and if you find over time that you typically have 'so much' in unexpected costs, you can account for that as I have, with an open-ended pot of money for whatever may come up.