One time "surprise" expenses?

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I run a self made budget spreadsheet that helps me keep track of what expenses I need to pay with which paycheck. I find it's easier that way. One thing that always trips me up, is surprise expenses. (kid lost his sweater, needs a new one. car repairs, house repairs etc)

I budget every single penny and every penny is allocated for before I even get paid. So when a surprise expense comes up, that extra money has to come from another envelope, as there's simply NOTHING extra to pay it with.

Lets say I have to pay $100 for a new tire. In my spreadsheet, I would probably "transfer" $100 from our "entertainment" envelope and put it in the newly created "New Car Tire" envelope. Next month, that envelope would not be copied over to the new spreadsheet (i make a new one every month) since it was a one time fee.

How do I handle this in EEBA? it seems pretty cumbersome to create a whole new envelope for a surprise expense such as "New Pair of Glasses" just so I could transfer money into that new envelope and then almost immediately deduct it out for the expense of buying the new glasses.

What do most people do in this case? Have a generic "surprise expense" envelope that is not funded until something comes up?

how would/do the EEBA staffers handle this?
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Posted 10 years ago

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Photo of steve386


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I'm not an EEBA staffer, but I'll tell you what I would do is build up the 'regular' envelope that matches the category of the expense and deduct it when it happens.

For example, if I needed a new car tire for $100 and had 3 months to save for it, I would put $33 extra in my "Auto: Service" envelope (which I already have to account for oil changes, etc), and then on the third month, buy the tire and take it out of the Auto: Service envelope.

For 'surprise' expenses, I have a "Misc: Other Expense" envelope that I try to keep $100 or so in for those types of occasions. If necessary, that envelope could be built up over time too.

Hope that helps! -steve
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Photo of cmchien

cmchien, Official Rep

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steve386's suggestion sounds good. Thanks for putting it out here where everybody can benefit!

In EEBA, you should think of Envelopes in two ways simultaneously: a) envelopes that you fund prior to doing any spending and b) categories that you can report on.

b) is why I would recommend steve386's method of using an existing "broader" envelope like "Auto: Service" rather than creating a brand new one for "New Car Tire". Otherwise, you end up with too many envelopes to provide useful reporting.

If you hadn't been saving up enough in Auto: Service for the unexpected flat tire, you will need to make a transfer from another envelope (e.g., Entertainment) in order not to go negative on Auto: Service. By putting it under "Auto: Service", though, when you review your budget you'll be able to see that averaging across a 12 month period, for example, you are spending $X in Auto: Service every month and therefore you should set that as your budget.

We also have a Miscellaneous envelope that we try to build up for those surprises.