Unexpected Expenses

The most frustrating part of budgeting is those unexpected expenses. I’m not talking about car repairs, medical bills, christmas gifts, or renter’s insurance that you only pay yearly – those should saved for separately. I’m talking about the one time ‘initiation fee’ your gym charges you or the ‘service fee’ when you sell on eBay; those one time things that come up all the time that are hard to budget for.

In the last month, I paid $35 for an ‘set-up fee’ for my dog’s health insurance, $14.99 for a credit report, and $6 for return shipping for online shopping. Before that, it was a deposit for Comcast internet and a gym initiation fee.

These things ate into my discretionary budgets the previous months. I was always wondering why I had so much less available for my ‘education’ or ‘shopping’ budget!

Unexpected Expenses Budget Solution

Even the most stringent budgeter will have a problem accounting for all of these things that could could come up, and often eats into the more ‘fun’ part of the budget. I did not enjoy paying for the credit report, but it was necessary! You can also include, for example, the gym initiation fee in the yearly budget ($50/month gym, $60 initiation fee, budget $55 a month for the gym). However, since I prefer to pay off my credit card bill to zero every month, the $60 fee was an overspend in the budget for the month when I paid down my card.

So this month, I did a budget overhaul and now have a ‘Miscellaneous expenses’ category of about $100 each month for those things that may be boring, but are definitely necessary or just ‘happen’ (ahem….parking tickets). Anything remaining that month goes to paying off debt or into savings, encouraging me to keep these unexpected expenses to a minimum and reduce them as time goes on, or create my own budget category for them if they keep coming up.

I use Mint for daily budgeting. How do you account for your unexpected but miscellaneous expenses?