Ways to Create a Backup Plan for Unexpected Expenses

Wendy Poling
Frequent Contributor

A deployment seems to be the perfect time for unexpected expenses to come our way. There is something about that boat leaving or plane taking off that triggers washing machines, dishwashers and cars to malfunction. Even if we have a well thought out budget, these events can really throw a wrench into our well-oiled budget/house machine.


The good news is with a little planning we can be more prepared for the next unexpected expense.


Make a list of possible unexpected expenses

  1. Write down every possible expense you can think of that is not covered in your normal household budget. This could include some common expenses like: vet bills, car repairs, and appliance repairs. Some other expenses that might be on your list include: gifts, new family additions, weddings, replacing your computer, auto registrations, etc.
  2. Don't forget to include last minute day trips, mini-vacations, possible emergency trips home, family reunions, carpet cleaning, furniture, hobby supplies.

This step is critical to the success of tackling unexpected expenses. Once we look at all the possible scenarios we might experience we will quickly realize most are really not unexpected at all. The problem is we are unprepared for them.


Ways to minimize these expenses

Once you have your list of possible extra expenses, discuss with your spouse to determine just how much you should spend on them, if any. Let's break down three possible expenses and how you can minimize the expense:


  1. Gifts could really be a huge budget buster. Gifts for birthdays, wedding gifts, special occasions can really add up and create a dent in your budget. Think of ways to be creative in your gift giving and still not break the bank.
  2. Family Additions: Having a baby is expensive. We can underestimate the cost of setting up a nursery: furniture, bedding, baby clothes, curtains, art work, etc. You can save by visiting consignment shops and scouring your local paper for coupons and clearance sales.
  3. Replacing your Computer: If your computer is a few years old chances are it will need to be replaced soon. If you are not already saving for a new one, consider purchasing a refurbished model or used computer to ease the hit on your budget. One other tip: Make sure you have an external hard drive to back up all your data to make the transition smoother!

Ways to save for unplanned expenses

  1. Saving a little goes a long way. Once you have your master list of possible unexpected expenses add them up to get an estimated yearly amount. This could be $1500 or more. Divide this amount by 24 (two paychecks a month) and work to save that amount. In a previous article we talked about how putting away just $40 every two weeks would add up to $960 in a year. By having this amount automatically transferred from your checking account to your savings account, you can easily watch that balance grow!
  2. Make sure you do have a budget and follow it! Long-term financial goals are important and staying on track will help you reach those goals. No matter how little or how much you make, budgeting and saving is the key to financial freedom.
  3. Still looking for money? Here are some other ways to save: lower your cell phone plan or get a "pay as you go phone", reduce your cable plan or cancel all together, visit your library and refrain from buying books and movies, plan your weekly meals and save dramatically on your grocery bill, trade pet sitting services with a friend instead of kenneling your pets for that upcoming trip (this could save you $$$'s), etc.

By taking the time to execute these steps, you'll go along way to reduce the stress and strain on your bank account. Your credit card balance will also thank you!


What are your tips to prepare for, plan and breath easy when unexpected expenses happen?


Related stories:
3 Ways to Plan for Unexpected Expenses USAA Spouse Community
How to Plan for Budget Busters
Stop Getting Sidelined by Unexpected Expenses Get a Backup Plan