Budget Busters

You've meticulously budgeted your expenses and have stuck to it.....only to have it shot down with a dreaded budget buster.

Budget busters are unexpected expenses that haven't been budgeted for, so when they come up, they take up valuable income that won't be available for other expenses anymore.

The good news is that you can actually plan for many of these budget busters. Some of these are completely unforeseen, while others just tend to be overlooked. Let's take a look at each type.

Unforeseen Expenses

Some expenses are impossible to plan for, because you can't predict when they will happen. Many of these you can expect to happen eventually, but can't be sure when. These include auto expenses, medical bills and major purchases.

Auto expenses are a common culprit for crashing your budget. If you own a vehicle, you should expect this type of unexpected expense. Cars break down. It happens.

Every budget should have an allotment for unexpected auto expenses. This doesn't include routine maintenance like oil changes, as those aren't really unexpected.

The types of auto expenses you can expect are things like body work, windshield replacement, tire replacement or repair and miscellaneous engine work. It is hard to know when your car will need these repairs, so you need to consistently budget for them.

Medical bills can kill a budget. It's hard to predict when you are going to get sick or hurt, so how do you plan for these?

Routine checkups excluded, you don't plan to go to the doctor or hospital. Even with insurance, co-pays and deductibles still allow the possibility of a hefty expense that will throw your budget out of whack.

Major expenses can also reek havoc on your financial health. What do you do if a major household item breaks and you must buy a new appliance or furniture? Chances are you haven't budgeted for any of these unforeseen purchases. Things get even worse when you get into really high dollar items like a vehicle.

Overlooked Expenses

Unlike the expenses above that are impossible to predict, other budget busters are completely expected, but tend to be overlooked. Don't let these burst your budget.

The types of budget busters we all tend to overlook include Christmas or other holidays, weddings, family parties, gifts for birthdays or other occasions, school expenses and vacations.

Most of these are fun, happy occasions, except when they bust your budget. Many times we are aware aware of each of these expenses, we just overlook planning for them. To make sure these have a place in our budget, it is important to create a monthly allotment in our budget to ensure that there is enough money when the event rolls around.

If your bank offers free checking or savings accounts, look into opening a holiday or a vacation account. Set up a monthly automatic transfer from your main account into your second account, so it will be full when the event comes around. This is a great way to keep from spending money you are saving for Christmas or vacation.

Stop Budget Busters

It is possible to stop budget busters from breaking your financial peace of mind. Identify the overlooked expenses that will come up during the year like vacations, weddings, holidays, etc. Along with these, include the unforeseen expenses like medical bills, auto repair and major purchases.

With this list, allot a dollar amount for each category. If you don't have much savings or discretionary income, it makes it a little more difficult to budget for these, although there is a way.

Take each allotment and divide it by 12 for each month of the year. If an event is within a year, divide the total by the number of months left until the vacation or holiday. This monthly number will be included in your monthly budget.

If you can't afford these monthly numbers, you won't be able to afford these expenses when they occur. You can either make more money or cut out some more expenses.

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