 This is the time of the year when most folks are thinking about one or more of these three things:
-
Losing weight or getting into shape.
-
Finding a better job.
-
Doing better with my money.
Since my friend and health expert Sarah Treat is much better at helping with #1, and I'll put off #2 for a future newsletter (you can check out my other Success articles for some helpful hints) ... allow me to give you a little help on #3.
Right now, you should be thinking -- and writing down -- your budget for the next 12 months. If you're a newbie, then focus on the next 30 days, giving every dollar a name in priority of how you should spend it: Food, Utilities, Mortgage or Rent, and Transportation. Then go to the next level of expenses: Clothing, School, etc. After you get this down, you can expand your thinking to months and not just days ahead.
One of the biggest challenges during the year is to avoid major surprises. You know, the expenses that seem to appear out of thin air. Things like: insurance premiums, vehicle or home repairs, home owner association dues, Christmas gifts, real estate taxes or a big vacation. Perhaps this is the year to
replace your vehicle, and you'll need some extra cash for the transaction. Or, maybe your summer electric bills have skyrocketed and you need to set aside some extra dough now to help take care of them. Whatever the need, you need a plan to deal with it now or they'll become an "un-planned emergency", or what I call ...
Non-monthly expenses. These are seasonal or occasional expenses that will highly likely happen some time during the year and you don't want them to surprise you at the worst possible moment. You know, like all at once! I call them "planned emergencies" since it's very possible to plan for them so they don't become emergencies. Think of it as your life's layaway plan. For convenience, you may use a unique checking or savings account to separate this money from your emergency fund or normal monthly household expense checking account.
For example, every month Lori and I set aside money for vehicle repairs. Today, we dropped off our car to have the brakes inspected. The bad news is that it's going to cost us about $400 to do the work. The good news is that at breakfast Lori updated me that we had a few thousand built up in our non-monthly checking account and we're covered. Whew! Amazingly, that same habit saved us over and over last year when we paid for some unusual out-of-pocket medical expenses -- another category that's good to save a little for each month.
Go ahead, put your Non-Monthly savings plan in place now so you won't have to go into hock with Guido (credit cards) and pay 30% interest.
Do it, and you'll be smiling like me when I pick up my car this afternoon and know that it's already paid for. Hallelujah!
|
Get "The Chuck Bowen Online Show & Podcast" automatically delivered to you by subscribing in iTunes!
