Today I want to share with you some common unexpected expenses, and why you need an emergency fund in order to deal with these. This is because more than likely we will not budget for these expenses, which leaves us left wondering where we will find the money to pay for them! No matter how financially prepared you think you are, life will always throw something unexpected your way!
- Medical, dental, and vision expenses
- Sick Pet
- Laptop breaks
- Car breaks down
- Need to purchase a new car
- Plumbing problem
- Electrical problem
- Clothes for a new job that requires you to dress up every day
- Get sick and you don’t get paid sick leave at work
- Mobile phone breaks
- Expenses for your kids extracurricular activities
- Washer/Dryer/Fridge/Dishwasher/Oven breaks down
- Destination Wedding for friend/relative
- Family emergency
- Gifts for baby shower, wedding shower, housewarming, etc.
- Flat tyre
- Fines e.g library fines, speeding ticket
- Electronics Replacement, eg. computers, phones, cameras
- Hospitality, eg. guests visiting, throwing a party, food
- Household supplies, eg. cleaning supplies
- Gardening expenses, eg. soil, seeds, fencing
- Furniture replacement
- You lose your job and you can’t find another one with the same rate of pay
- You (or your partner) unexpectedly get pregnant
- You find yourself with a debilitating illness
- Your hours are cut at work
- A friend or relative in crisis moves in with you for a while
- You’re evicted from your home
- An unexpected bill
- Your account becomes overdrawn
There are a number of ways you can prepare for unexpected expenses. One is to save more money. Set aside a small amount in your monthly budget for your emergency fund, and you’ll have no added stress when any of them pop up.
To create an emergency fund, open up a savings account make a commitment to put money in every month. You could even set up a standing order so your bank does it automatically.
An emergency fund is cash you have saved that you can dip into in an emergency. An emergency fund should be enough to pay all your most important bills for several months. Three months worth of your income is a good minimum to aim for, although the exact amount you need depends on your circumstances.
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If you don’t already have an emergency fund, it may be time to start one…you might thank yourself in the future!!
10 years may seem like a really long time, although it can pass very quickly. It’s hard to even imagine what your life will be like then.
However, having a 10-year plan can help you to make all the decisions you need to make today to get you to where you want to be in 10 years time and help you to clarify your most important priorities.
Your life is defined by the choices you make today.
Your 10-year plan doesn’t need to be as long as your arm, it just needs to be what you want your life to look like in the future and what you want to achieve.
Here are some definitions to help you:
Vision – the ability to think about or plan the future with imagination or wisdom
Purpose – a person’s sense of determination
Goals – the object of a person’s ambition or effort, an aim or desired result
Determine your priorities:
Firstly, work out what you want to have achieved 10 years from now – you can break this down into yearly goals or even 5-year goals.
What do you want to accomplish in life?
What kind of person do you want to be?
What is most important to you in life?
How would you like to be remembered?
You can assess what you want to achieve in the following areas:
- Self Development
Think about financial goals – how can you use the next 10 years of your life to move towards financial security?
- Starting a pension
- Saving more money
- Asking for a promotion
Think about fun goals – where would you like to travel or what activities would you like to accomplish?
- Travel the world
Think about family goals – would you like to have a family or if you’ve already started your family what are your goals for them?
- Having a child
- Saving money for your child’s education
- Moving to a larger home
Use SMART goals
SMART is an acronym that you can use to create your goals. This means:
A goal is your ultimate destination. Objectives are the paths you need to take to arrive at that goal. Goal setting promotes a long-term vision and a short-term motivation.
You can also create a vision board to stay on track with your 10-year plan. You can use a frame or noticeboard and stick on pictures that identify your objectives. Place this board where you can see it every day so that you are reminded of your main goal and what you need to do to get there.
Hopefully, this post sends you on your way to building and creating your own 10-year plan! As always, let me know if this post has helped you by tweeting me at @BritOnABudget1 and telling me your goals!
Taking the time to create a budget can help you save £1,000s a year and keep on top of bills. By working out a budget, it can mean you are less likely to end up in debt or caught out by unexpected costs or money emergencies. This post will show you how to create your own personal budget, and how to keep up with it.
- Work out your outgoings (household bills, living costs, travel costs, leisure etc). The best way to do this is to look at your bank statements and work out an average amount for each category (don’t estimate it as this won’t work!)
- Work out your income. This includes extra income you make from surveys, a second job or hobbies.
- Cut back your budget. If you are spending more than you have coming in, you can solve this by cutting unnecessary spending such as buying lunch out or cancelling the gym membership you never use. You can also save hundreds of pounds on your bills by switching providers to a cheaper alternative.
- Keep on top of your bank balance. Alongside sticking to your budget, it is useful to check your bank every day so you are aware of any unexpected money going in or coming out your bank.
- Set a savings goal. This will keep you motivated to keep up with your budget and will also help you to build an emergency fund which will help you pay for unexpected emergencies.
I hope this post has helped to set you on your way to creating a budget!
Thanks for reading, tweet me @BritOnABudget1 any of your best budgeting tips!
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