By: RH
You’ve been trotting along all year. You’re staying on budget when a budget buster hits you off track. The budget buster is an item that happens once a year or even twice a year. However, we forget about it because it is not a monthly occurrence. Thus, it is not on your monthly budget.
Budget busters are things like:
New car tires;
Car repairs;
Car insurance;
Heating or Air going out;
Christmas;
Vacation;
Life insurance premium;
Property taxes;
Property Insurance
Health Insurance deductible;
Unexpected medical bills;
Unexpected pet bills;
Household appliances needing repair or replacement.
We could go on, but I think you get the idea. How do we account for these expenses on our monthly budget? We divide each by 12 and list this amount on our budget. For example, if our property taxes were $1,200 last year, our monthly budget will note $100 for property taxes.
In our example above, we would have to save $150 a month to cover these two expenses. If you are paid bi-weekly, in order to find out how much you would have to save each month, you would need to divide the total for each item by 26.
As you can see from our above example, you would be saving $69.21 per paycheck. Some of you might be paid semi-monthly. If so, you would dividing the total amount per item by 24. In this way, you’ll save that amount per paycheck. Remember, to include all of your budget busters when you prepare your monthly budget. By doing this, there won’t be any surprises.
