Last month I had to take my car into the shop to get some work done to the tune of about $350. It was a pretty significant amount to pay and I was not too thrilled about it. (Although on the way back home I realized that people pay $350 every month in car payments!) But fortunately, it did not set us back much financially because we had planned ahead for it.
One of the biggest mistakes people make when managing their money is not looking ahead and projecting future expenses. We are good at planning for the every month necessities such as groceries, utilities, and housing. But we struggle preparing for those “unexpected” expected expenses such as car repair or a broken heater. Also, those one-time non-monthly expenses such as birthdays and vehicle registrations can set you back. The thing is that these non-monthly expenses are not uncommon. Cars do break down and need repaired, birthdays are the same day every year, and registration fees and dues are known ahead of time. You need to sit down at the beginning of the year, look ahead and list all the birthday gifts you will be buying. You will need to put aside some money each month to prepare for the inevitable car repairs. It might seem impossible to predict now, but after you do it for awhile you will get an idea of how much it costs to repair your car each year and how much you spend for birthdays and other occasions each month.
Sit down today, look into the future and try to predict these special expenses. By having an idea of what these expenses will be, you will not be blindsided and will actually have the money in savings to pay for them once they come up. But do not hesitate and let them sneak up on you. By budgeting properly and having the money up front you will be able to stick with your financial plan.