Editorial Policy

The unexpected expenses that have been attacking my budget

Kristin McGrath

December 6, 2013

I have an emergency account. And I count myself as one of the lucky folks who can keep enough in a checking account for regular expenses and some fun on the side.

But what about those sneaky “gray area” expenses that aren’t quite emergencies, aren’t quite regular living expenses and definitely aren’t fun? Here are a few I’ve encountered in the past month:

  • My vacuum cleaner broke. It wasn’t the end of the world, but I was surprised by how quickly an oatmeal-colored carpet could start to look dingy.
  • My car needed new tires. When I took my car in for a state-mandated safety inspection, my mechanic reminded me that I hadn’t replaced my front tires since he’d first suggested it a year ago. This time, his reminder was less of a suggestion and more of an “I wouldn’t let my wife drive on these tires” kind of thing.
  • My seven-year-old laptop is not long for this world. It has been lugged around constantly, dropped on cement and crashing more and more frequently. I’ve already backed it up, knowing the end is near.
  • My passport expired. I don’t have immediate plans to go abroad, but I don’t want to scramble with “expedited passport” fees when I do. So I opted for the regular, slow snail mail option — and it was still $110.

Minus the new computer (which I haven’t bought yet), these other expenses have cost me almost $460 in roughly a month (even though I had a gift card that I used to pay part of the cost of the vacuum cleaner). I run a pretty tight ship when it comes to my checking account, with money automatically getting siphoned out toward emergency and long-term savings when I get paid. So it’s not as if I have an extra $500 in checking at the end of the month, on top of what’s needed for rent and other bill payments. And I didn’t want to dip into my emergency savings (which I consider designated for scenarios much scarier than a broken vacuum cleaner).

Luckily, my financial adviser had encouraged me to also send a small amount a month to a “general” interest-bearing savings account for big expenses that crop up between now and retirement. Eventually, the contents of this account will be my down payment on a car. I transferred $480 to my checking account and used it to pay those gray expenses (some of which I routed through my credit card to get rewards points).

This experience taught me an important lesson: While I almost always deliberately save for fun short-term financial goals (such as a new camera or a vacation), I never think ahead about the non-fun stuff, such as tires. As this blog on Breakthrough Personal Finance Trainers points out, there’s no excuse for that, because many of these expenses can indeed be predicted. I knew for a year I should get new tires. My passport had the expiration date printed right on it. My vacuum had been getting gradually less effective and making strange noises. And it’s a miracle my cheap laptop is still hanging on. I could have spread those expenses out over almost a year instead of waiting for the holiday crunch — or sent a bit more each month to my general savings account (rather than making a huge dent in it all at once).

I feel incredibly lucky that I was able to pay for unexpected expenses without going into debt, but I can do better. I plan to be more aware of these types of expenses in the future, and I’m going to start with my laptop. I’ll be sending extra money into my general savings account for the next several months so that I won’t be hit with a massive surprise expense when my laptop dies for good — and rely on my phone or my boyfriend’s computer until I’ve saved enough to pay for a new computer in full.

Need help predicting big expenses — or dealing with those that sneaked up on you? Follow this advice from the personal finance blogosphere:

The Personal Financier explains how you can predict, with surprising accuracy, the expenses you think are unpredictable.

Simple Finance Blog provides a road map for those who get surprised by expenses and don’t have enough savings to cover them.

Experiments in Finance walks you through the options for covering expenses you didn’t plan for — and the possible risks they entail.

My Open Wallet warns that avoiding not-quite-emergency expenses for too long can make them grow into costly emergencies.

Evolving Personal Finance shares a story that illustrates how unexpected expenses can quickly derail your financial goals.