How do you manage unforeseen expenses?

POSTED BY whitecar ON November 15, 2014 7:26 pm COMMENTS (4)

At times I wonder how much ever planning we do for financial expenses there’s always surprises ( which may be due to poor planning too..!)..

For eg.,we would have thought of spending X amount of money or never thought of spending any money say for an unexpected dinner party with friends or

your wife went for shopping and she found the exact necklace or saree she has been looking for many years (which we would be completely unaware of!!)…OR

your in-laws came for a weekend unplanned and you had to take them around the city/eat out/ buy gifts for their child etc.,

how do you allocate budget for such unforeseen expenses for which you never really know how much you may spend??!

Of course, you may also make surprise visits to your friends or in-laws place and make them spend .. !!

4 replies on this article “How do you manage unforeseen expenses?”

  1. Lokesh Jain says:

    Hi Whitecar,

    Yes you are right in that. But the expenses that you have questioned above are not that big. So that can be removed from your emergency fund and again when your next salary is in your account, you can top up your emergency fund with that amount.

    Regards,
    LJ

    1. whitecar says:

      Ok.. kool.. thanks for that 🙂

  2. whitecar says:

    Hi Lokesh – Thats just my nick name ;).. anyways.. I always thought Emergency funds are for real emergencies like you go out of job or there is some sudden illness in family that requires immediate attention (on top of health insurance). I always see emergency fund as something you shouldn’t take out unless the situation is too bad!!

  3. Lokesh Jain says:

    Hi Whitecar (wondering what kind of name is this :P) ,

    Well, this is where your contingency fund or emergency fund comes into picture. This is the first step of financial planning – Making an emergency fund. There are many formulas to calculating emergency fund – 3 times of your monthly expenses OR 6 times of your monthly expenses suiting to your needs and expenses.

    Hope this answers your question. 🙂

    Regards,

    LJ

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