How do I budget for unforeseen expenses?

Once you manage your basic income and expenses with the help of, then you can determine in advance if you will have enough money to cover unforeseen expenditure.

Has it happened to you that you check that your finances are in order and you decide to give yourself a taste? But suddenly, that same month, an unexpected expense arises that takes you out of your budget and you start to mess up your accounts.

We do not want this to happen to you, therefore, we give you the best tips for you to put together an annual budget to help you manage your unforeseen expenses. We all intend to have a clear and orderly budget for each month. However, these sudden expenditure will always arise that will shake our pockets.

Unfortunately, they are inevitable and appear throughout the year. Usually, they take us out of our monthly order, so we need postponing certain debts or other responsibilities that, ultimately, end up harming us more by having to spend more than we earn.

What are the unforeseen expenses?

It is not common to have a fund for unforeseen expenses. In fact, after the result of some Surveys, it does not include funds for unexpected expenditure in the structure of family budgets.

Due to the above, it is useful to ask what is considered as an unforeseen expenses ?

  • Accidents
  • Emergency trips for family reasons
  • Diseases
  • House arrangements
  • Car arrangement
  • Payments for concepts of some type of procedure
  • Birthday gift for your boss

In short, an unforeseen expenditure would be anyone who had not contemplated in your budget and, when you present yourself, you cannot avoid, which imbalances your finances.

Unforeseen or unexpected expenses are situations that we did not have in our budget and can generate more than one headache.

3 tips to plan your unforeseen expenses

Now that you have an idea of ​​what are the most common unexpected expenses, it’s time to plan them to start managing your money in an orderly manner.

  1. Organization by date range:

If it is the first time you will create a plan to sort your budget, it is best to start six months and not one year. By doing so in this period, it will be easier to forecast in which months your finances are tighter and in which you could generate extra money.

Now, if you choose to extend your budget for the second semester, you can have more clarity in predicting how much money you can save for your vacation expenses, renovation of household items, new cars, etc.

  1. Set a percentage of your money:

Applying the 50/20/30 rule is ideal to plan expenditure well, 50% for the most basic, 20% for savings and 30% for personal expenses. This is how the Expansion finance portal explains it.

We also recommend that you set a certain amount that you can use for unexpected expenses each month. The most important thing in this last point is to remember that saving is not money that will not be spent; it is money to spend later.

  1. Define fixed expenses historically:

To plan your budget and define the most common unexpected expenses, you must first be clear about the income you will receive each month and identify the unexpected expenditure of the previous year.

Make a list of the most common unexpected expenses of each period, then check the bank statement and credit card last year to determine where the extra expenses were intended. If you have children, consider how much you disbursed in school, materials, sports engagements, classes or other recreational activities.

This simple calculation will help you determine the amount you can allocate to cover unforeseen expenditure.