When helping my clients prepare their budgets, we usually go through the previous month’s expenses to create an average amount spent on each category (food, rent, utilities, gas, bills, etc.). Inevitably, we will come upon an expense that does not fit into the usual categories mentioned above. The usual response is “Oh, that was a one-time expense,” “That usually doesn’t happen,” or “I won’t have to pay for that again so we don’t need to budget for it.” The problem with this thinking is the fact that these “unexpected expenses” happen every month. They may be for different reasons or have different amounts, but the reality is that there are always exceptions. It is wiser to acknowledge that things we don’t anticipate happen all the time, and it is better to prepare for these things rather than get caught off guard.

What are these exceptions that I am talking about? Here are a few examples:

• My sister came to visit me and we went out to eat a lot this weekend.

• I ran over a nail on the road and I had to get my tire replaced.

• It was my brother’s birthday and I had to buy him a gift.

• I had to buy scrubs for my nursing uniform.

• My class required an online subscription I had to pay for.

While these instances may not happen on a regular basis, it is prudent to leave margin in your budget for unexpected expenses. Here are a couple ideas for how to plan for the exceptions:

1. Create an emergency fund. This is money set aside (usually in a savings account) that is specifically used for emergencies only. You have the ability to decide what qualifies as an emergency for you – however, make sure that you define that for yourself (maybe write it down) so that you do not use this fund for expenses that you do not consider to be an emergency. Having this fund creates a safety net that will enable you to cover the cost of the emergency while still being able to meet your regular financial obligations.

2. Create a spending category in your budgeted monthly expenses. This is a category for those expenses that do not fall under the normal monthly expenses. Try to create categories for everything that you can predict (such as gifts, car maintenance, clothing, or medical expenses), but then also create a category for items that you did not anticipate. The difficulty here is deciding how much to allocate to this spending category. It is hard to estimate how much things that you don’t anticipate will cost. Remember, budgets aren’t set in stone; therefore, if you find you find you need to lower or raise a category, you have the freedom to do so.

If you need help creating a budget or need someone to hold you accountable to sticking with your budget, schedule an appointment with a NEXUS coach!