Planning for Expenses Using Sub-Accounts

Surprise of all surprises, the toolbar light came on in the car. The mechanic looked it over and said, “You are due for new belts, hoses, spark plugs, and an oil change. That’ll be $972.” My heart skipped a little beat. I paused, thinking about the money that we have saved in our sub-account marked “Car” and said, “Go ahead”. Sigh. At that moment, I was grateful that I had painstakingly saved $100 in to the “Car” account for the last few years.

It’s the little things that you have to think about when setting up your Spending Plan. Things like car repairs, birthdays, vacations, and furnace repairs. Just a few things I’ve had to fork over since the beginning of the year. When I sat down and looked at our monthly expenses, I included a line item for things like the above mentioned. I don’t like to feel panicked when it comes to money. I experienced that in my early 20’s and I NEVER want to experience that again. So, I’ve learned from my painful mistakes and I’m preparing for catastrophes to happen. Like having to pay almost $1000 on maintenance for the car.

So, do you want to learn how to not panic when you have to pay a large bill? Here’s what to do. Make a list of your expenses monthly. Things like:

  1. Mortgage/Rent
  2. Utilities
  3. Car payment
  4. Food
  5. Tithing
  6. Gas for vehicles
  7. Phone
  8. Debts

Now, think about the things that aren’t included in normal monthly expenditures such as:

  1. Birthdays
  2. Hair cut
  3. Date night
  4. Christmas
  5. Car maintenance
  6. House maintenance
  7. Hobbies
  8. Vacations

Estimate how much you would like to save for each of things. Think about what you can afford each month. Sometimes you can only afford $5-$10 per paycheck for each category. That’s ok. Now, set up an automatic transfer from your checking or wherever your paycheck is deposited. Every time you are paid, that money is then whisked away into your sub-accounts specially marked for your goal.

You might be saying, I can only afford $10 a month for Christmas, but I want to spend more than $120 at Christmas. What can you do? Here are a few things I’ve done. When you earn extra money such as selling something in a garage sale or on Craigslist, then put that money in the account you are wanting more money to go into. Simple. You could do that, right? I’ve also, gotten a 2nd job to fund sub-accounts. For example, my vacation account. I want to go on a nice vacation in the worst way. Every time I work for the military, I take that money and put it in my vacation fund. Our “Date Night With My Honey” sub-account is funded by cashing in our points on our credit card. That is the only way that sub-account is funded. Thank you Chase Visa for helping us have date nights.

Just some ideas to help you prepare for future expenses. Let me know if you have tricks to save for unexpected expenses.

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