Did you happen to see your finances are in order and decided to treat yourself? But suddenly, that same month, an unexpected expense arose that took you out of your budget and messed up your accounts.
We do not want this to happen to you, for the same reason, in this blog we give you the best tips so that you can put together an annual budget to help you manage your unforeseen expenses.
We know that you intend to have a clear and orderly budget each month. However, there will always be these sudden expenses that will make your pocket shake.
Unfortunately, they are unavoidable, and appear throughout the year. Usually, they take you out of your monthly order, so you find yourself in the need to postpone certain debts or other responsibilities to face them. This ends up hurting you because they lead you to spend more than you earn.
A review of the main unexpected expenses of the year
Unforeseen or unexpected expenses are situations that you did not have contemplated in your budget and that generate many problems.
For this reason, you need to understand what they are and how they differ from the usual expenses known to Chilean families.
The most typical are: medical incidents, accidents, deaths, annual insurance premiums, business card interest, line of credit penalties, costs related to emergency home repairs, vehicle repair, medicine, gifts and special occasions, classes, sports courses or other activities, marriages, emergency trips, among others.
3 tips for planning your sudden expenses
Now that you have an idea of what the most common unexpected expenses are, it is time to plan them to start managing your money in an orderly way.
- Organization by date range: if it is the first time that you will create a plan to organize your budget, it is best to start with six months and not one year. By doing it in this period of time, it will be easier to predict 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 vacation expenses, renovation of household items, new car, etc.
- Set a percentage of your money: applying the 50/20/30 rule is ideal for planning expenses well: 50% for the most basic expenses, 20% for savings and 30% for personal expenses, depending on explains the financial daily Expansión.
We also recommend setting a certain amount that you can use for unexpected expenses each month. If, for example, you earn $ 600,000 and save 10% every month, at the end of the year you will have $ 720,000 that you can allocate for whatever you want, if there was no need to use it to cover an unplanned expense.
The most important thing in this last point is that you remember that saving is not money that you will not spend, but rather it is capital that you will use later.
Therefore, we recommend you learn to put together a savings plan depending on your budget and needs.
- Define fixed expenses historically: to plan your budget and define the most common unexpected expenses, first be clear about the income you receive each month and identify the unexpected expenses from the previous year.
Make a list of the most common unexpected expenses for each period, then refer to last year’s bank and credit card statement to determine where the extra expenses went. If you have children, consider how much you spent on school, supplies, sports commitments, classes, or other recreational activities.
This simple calculation helps you determine how much you can put aside to cover these unforeseen expenses.
If you still don’t know in what format to put together your budget, organize it to the last weight and in an orderly way with this free template that we have for you.
Conclusion:
If you learn to manage your income and expenses, you can determine in advance if you have enough money to cover expenses. And remember, if you are not going to need to make use of that emergency money for a few months, it is best to save it.
In addition, if you receive money that you did not have contemplated, we recommend you save it to build a fund that you can use at any time of the year, such as to cover the expenses of the second semester.