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Spontaneous Spending: Add It To Your Monthly Family Expenses
New shoes are part of your extra expenses if they weren't on your list.
Do You Have Unplanned Spending In Your Family?
You know those expenses. The $3 cup of coffee on the way to work. An impromptu lunch with a co-worker. Even a candy bar at the checkout when you're grocery shopping. We all do it once in awhile, and that's okay if you can afford it. But do you have any idea how much you're spending on a regular basis for things that aren't budgeted in?
If you are trying to pay off debt or save money, those spontaneous expenses can add up and rob you of money designated for something else. You may be one of those people who plan not to buy anything except what is necessary, but then you give in with the thought that "a couple of dollars won't hurt." I did that for a long time and wondered why I never had any money. I was shocked to realize how it added up.
Calculate Your Montly Miscellaneous Spending
To get your unplanned expenses under control, the first step is to figure out where the money is going. For the first month, track all of your expenses that are not part of your family budget. This includes any expense:
- Coffee, sodas, snacks
- Lunches or dinners out
- Shopping for items not planned
- Movies and other activities
At this point, you are not going to alter your habits, just track them. Write everything down for the month; the amount, store, and what you bought. Make sure everyone who spends money does this.
At the end of the month, sit down and figure up how much each person spent. This number may shock you as you realize you are spending more money than you think. But don't get discouraged; now that you are aware of it, you can deal with it.
Count It as Part of Your Family Expenses and Add It to The Budget
Once you know how much you spend on unplanned items, you can create a budget for it. First, decide if you want to continue with that amount each month or reduce it. If you want to pay down debts or save money, you might want to consider cutting down on your unplanned spending and putting that money towards a bill or in a savings account.
Now comes the hard part: figuring how much of an allowance you are going to give yourself and your family. You want to cut your spending enough to see an increase in savings or fewer bills, but not so much that you won't stick with.
You can choose between one of two options for cutting down on your spending. The first is in cutting back by a percent, say 10% of what you spent the month you tracked. This will force you to think about how you want to spend your money, but not be too restrictive.
The other option is to choose specifically what you will cut out by activity instead of dollar amount. For instance, you may decide to pack your lunch two days a week and only eat out three days instead of every day. All other spending will remain the same, but the money from those two days each week will be put in savings. This method is easier for someone who is afraid of spending their monthly allowance halfway through the month from poor planning.
Technically, if you eat out for your lunch on a regular basis, it may not count as spontaneous spending, But it is often included in miscellaneous expenses because you do not plan where you will eat for each day.
Once you have a family allowance for everyone, make sure they know that they can't get more money when that is gone. After a couple of months, get everyone together and reevaluate. Are you ready to cut down even more or has this been enough of a cut to make a difference in your budget?
Planning Your Spending Can Save Your Budget
Our budgets often get overspent by things we don't plan for. While you don't wnat to plan for every single purchase you make in a month, you do need to plan to make some of those purchases. The best way to do that is to give yourself spending money and calculate it into your monthly budget instead of just figuring it as you buy things.
If you add in money to eat out so many times a month or order in pizza when you don't feel like cooking, you won't be sitting down trying to figure out how to readjust your budget for those things. This prevents you from spending money you don't have and postponing payments to cover those expenditures.
A budget shouldn't be a negative tool; it should help you manage your money so you can have things you enjoy. Calculating your spontaneous spending into your family expenses will allow you to have some fun without added stress when it comes time to balance your budget.