If unforeseen expenses give you a headache and disrupt your financial plans, then this is a topic that will interest you.
On consultations and in messages, I am often contacted by people whose unforeseen expenses regularly disrupt their plans. That is why it is hard for them to set aside as much money as they want for savings and to pay off debts, because there is always some unforeseen expense.
These expenses can be of different types, but the point is that they will always be there. Sometimes these expenses are not so sudden, but sometimes we forget someone’s anniversary or birthday, we forget that some installment is due, and so on. So, sometimes it is our fault that we forget.
If we take a little time at the end or beginning of the month to plan what awaits us that month, then we will be more likely to predict exactly what our budget will be like next month.
Of course, there are indeed some expenses that we cannot foresee, such as an emergency medical examination or intervention, a car or home repair, etc.
I believe that sounds familiar to you.
What is important to know about these unforeseen expenses is that no matter how much we cannot predict whether and when they will happen, the chances are high that there will always be SOME unforeseen expense. If we don’t see something, it doesn’t mean it doesn’t exist.
Unforeseen expenses will not disrupt your budget if you set aside money for them in a certain percentage of your income or expenses. Be it 10%, more or less, it is left to you to estimate what percentage gives you enough room to maneuver.
And when you take into account unforeseen expenses when planning your budget and set aside money for them – then they won’t surprise you and disrupt your budget. If there weren’t any – GREAT; that means you can now set aside that money for your reserve, which is an additional backup in case of unforeseen expenses.
This is the case with the monthly budget, as well as with the planning of some major investments.
I’ll give you an example…
I recently had a major investment – installation of gas heating in a more than 100 m2 house. This costs several thousand euros. Before I embarked on this project, I asked for a written offer and got it. However, based on the offer, I immediately calculated another + 10-20% of that amount, because as a rule, there will almost ALWAYS be more expenses.
So, you always have to leave some space for your budget to “breathe”. If you get an offer of 3,000 euros for something, you add at least 10-20% that you will pay on top of that. And vice versa. If you have a budget of 3,000 euros, then you need to be within a range of about 2,500 euros, so that you have 500 euros left for some unforeseen expenses that may occur.