Budget Busters: Setting up a “Non-Emergency” Emergency Fund

Creating a workable budget seems pretty straightforward. We have several categories, which help us allocate money, making sure we’re tithing and covering all the essential bills that need to get paid. However, it seems like there are always little things that come up to throw a wrench in our well-laid plans. I find these are usually things that catch me off guard like school pictures or pictures for team sports, a birthday present for a little friend at school or a surprise baby shower.

This time of year can get especially crazy with sending cards, participating in the “Secret Santa” or some other gift exchange, not to mention everyone to whom we want to give a little token to let them know how much we appreciate them. I get especially overwhelmed by baking this time of year in order to make sure I have something to take to my hair dresser, our neighbors, and the kids’ teachers, to name a few. Even if the gifts aren’t anything more than a nice plate of cookies, if there are enough of these small tokens of appreciation, it can put a significant dent in our normal budget.

Throughout the year we have hopefully been setting money aside into our Emergency Fund for the large purchases to avoid using our credit card. However, we can just as easily find ourselves in trouble with the here-and-there, nickel-and-dime purchases for these smaller, non-emergency items that crop up. These little things are sometimes the foot in the door to larger debts, opening the floodgates by giving ourselves permission to use the credit card. Unfortunately, as the smaller expenses pile up, they become just as unmanageable as if we had made one large purchase.

There are a few ways to help keep these small items from creeping up and overwhelming us. Having separate accounts for every little thing can be cumbersome, but it might not hurt to have a small, non-emergency fund available for those moments when we are taken by surprise. It doesn’t necessarily have to be a separate checking account. It could just be a running balance in your accounting method that you knowingly keep separate. It could even be an envelope or jar where you keep cash so it is available for those times when you are called upon to chip in for a gift for a teacher or coach.

Another option is to purchase small gifts as you come across them for those spur of the moment invites. If you have young children, attending classmates’ birthday parties is practically a weekly event so having a stash of child-friendly gifts on hand is almost essential to staying ahead of the credit card game. Even purchasing gift cards in small denominations is helpful to keeping the budget on track when these small unexpected expenses come up.

As our year draws to a close, now is the time to analyze the previous 12 months of spending to see exactly how much we spent on these last-minute gifts. We need to use our records to identify when we’ve needed spare cash for the school pictures, the Booster Club concessions (to show our support, of course), and the cute kids that come by selling popcorn for their school fundraiser, and use this information to plan accordingly. With a new year upon us, all it takes is a few minutes to evaluate and plan ahead to make sure we are prepared.

“Love the Lord and follow his plans for your lives. Cling to him and serve him enthusiastically.” ~ Joshua 22:5