uncategorized / Overlooked Expense types

POSTED BY Pratibha ON December 2, 2012 9:38 pm COMMENTS (5)

Friends,

Some of the Personal goals are generic in nature such as Retirement Planning, Education and Child Marriage Plans. Some of them individual specific.

In our daily life, we often overlook and we come across expenses which we dont anticipate or think of. I know Manish has written an article on this and mentioned about saving for unthink expense ( may be car repair due to accident/breakdown, Urgent Flight expense, Replacing TV/Fridge/AC etc etc )

Can some of you comment on the expense type which we overlook which we need to taken into consideration during Retirement, Child Education, Child Marriage goals…

Examples:
  Yearly Insurance Cost
  Replacing Car, Home Appliance due to breakdown/Non working state
  Tution Costs
  Home Repair cost ( Painting, Leakages, Worn out Interiors )
  Gifting in Marriage/BabyShower 🙂 

Thanks

5 replies on this article “uncategorized / Overlooked Expense types”

  1. Deepthy says:

    Pattu Sir, I have posted the sample excel sheet to your mail id. As I also mentioned in the mail, it’s a simple sheet with no complex formula or macros but has helped shape up a realistic budget over few months.

    Hope it helps.

  2. HI deepthy I am interested in studying your excel file. If don’t mind sharing it my mail add is
    pattu [AT] iitm.ac.in

    Thanks

  3. Pratibha says:

    Great. Thank you Pattu and Deepthy. Your insight and direction helps to bridge the gap between the ball park and the realistic figure…

  4. Deepthy says:

    Hi Pratibha,

    Had the same query few years back when I started saving for early retirement & what helped was when I started my own Bills & Payments excel sheet and started recording each and every credit & debits – expense and bills that I pay & the income that I get.

    I have everything here from salary credits to debits such as ATM withdrawals, credit & debit card payments, electricity/phone/internet/LPG/apartment, vehicle & equipment maintenance/AMC bills, regular life&vehicle insurance/NSC/RD/other tax saving option/premium/property tax payments and other recurring bills like software license renewals, satellite radio/DTH/online movie renewals etc. Think I have included almost all categories – you might have more, pl do a braindump to see what else you pay daily, quarterly etc. Most of your regular small expenses will be covered under ATM withdrawals & credit/debit card payments. Tip is that whenever you pay remember if you have the item on your chart – if not add it.

    Over 1year you will have a stable excel data of yoru incomes & expenses short & long term – I added a row for contingency too for those ‘just in cases’ that are not covered by insurance. Of course how much ever one plans, life can deliver surprises. One need not go on a negative mental trip of the darkest possibilities and just try to do our best – what else can we do, rt?!

    If you are a couple, a combined Bills&Payments Chart would help.

    This chart will not only give you an idea of your actual monthly/annual budget, it also helps you to decide on which items to take off the list over the time to reduce your expenses & save more, this also allows you to keep a track on when your next payments are due so that you never even miss a single bill payment. You can also use this to find over the time, how to pay more of your bills online etc.

    I look at the sheet every month & set up mobile alerts for the payments due from me for the month ahead & that way I keep my liabilities organized. This may be one step too much perfectionism but has helped me:-)

    I am unable to attach my Excel sheet here else would have shared with you. But here’s how the heading reads:
    Periodicity (values like Monthly, 2Monthly, Semesterly, Yearly, 2Yearly, 6Yearly etc)
    Payment Options (Cash, cheque, credit card, online)
    Service Short name (like TATA-AIA, AIRBB etc)
    Service Description (like Tata AIA Nirvana policy annual premium, Airtel Broadband etc)
    Due Month/Date
    Approx Amount
    Bill/Payment Notice will be sent by Date
    Period available to pay (like 10days – this will give you an indication of urgency)
    Remarks (add their contact number, mail id etc)
    Account Details (note your Cust Id, Account number etc related to the service)
    Pay Urgency (values liek CurrMonth, CurrQtr, NxtQtr, NxtQtr2&3, NxtYear, OnYear2 etc)
    Payment Website (add the website where you can pay BangaloreOne, Visabillpay)
    Service Provider’s Home Site (add their homesite in case you need more info)
    Debit or Credit (mark it as debit or credit so that you can see your debit credit balance in a summary sheet)

    Make a summary sheet out of this and find out where your money goes…it will never cease to surprise you! Hope this helps.

  5. For AMC and scheduled repairs and annual expenses I usually invest each month in a RD or liquid fund

    my monthly budget has a 5 K allocation which takes of those baby showers or weddings
    or anything unforseen

    I have an emergency fund (6 months expenses) and I make sure I dont touch it for these kind of expenses.
    One lesson I recently learned: You must always allocate a little something to the emergency fund each month even if it is adequate.
    Life can throw a googly at you and if you get an unanticipated new monthly expense to be handled for the rest of your life the money that streams into your emergency fund will help out at least a bit.

    If you want god to laugh tell him your plans goes a saying! We can only continuously live and learn and make sure our mistakes are new!

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