You probably know the feeling – you have a bit of money and have made great plans on how to invest it, when an unexpected expense creeps up and sets you back a couple of months!
In my case this time I wanted to make a good mortgage overpayment, and the unexpected expenses were:
- New computer glasses – they were not due by my daughter managed to break them while ‘playing’.
- New smartphone – again, my daughter finds it funny to throw it around when she can get her hands on it, so a few weeks ago I had to give in and buy a new one.
- Extra childcare costs – she had a temperature for three days, so could not go to nursery, so as not to infect the other kids. That meant paying for the nursery plus a nanny for two days. Then we had a repeat of the situation for one day the week after. For a total of 3 days of double, expensive childcare.
- A personal and rather high expense recurring every 3 years that I had completely forgotten about.
The total of these extra costs is over £1,000 in just 4 weeks – whoa!!!
How to deal with unexpected expenses
As { in·deed·a·bly } recently wrote, unexpected expenses do happen. This is how I normally look at these elements. Feel free to add your tricks in the comments.
Can I expense this?
As a self-employed contractor luckily I can expense both my glasses and my new smartphone. This means I don’t have to pay tax on them but I still need to pay for them. A little saving, but still a cost.
Avoiding unexpected expenses
I now keep my glasses, phone and any other breakable & technology item high on our bookshelf, far from my toddler’s eager hands. Avoiding an expense is the best way to save more.
Planning
High childcare costs are just something we have to live with. We have chosen to live in London. Autumn and winter means kids get sick occasionally and we just have to accept that we may incur in extra costs. As we don’t have family closeby if our daughter gets sick unexpectedly we either have to make time ourselves or we have to pay someone else.
Setting reminders in my Google Calendar
Forgetting a high, upcoming expense is hugely upsetting to me! There is no excuse for forgetting something like this, I really need to get on top of this! And I am now doing it now for free by setting alerts into my Google Calendar – one month ahead, and one one week ahead of the expense. And I use this system for all recurring expenses and generally reminders.
Savings, miles and cash back
I could not have faced these unexpected expenses without some savings. I always have 4-6 months worth of savings that I can easily tap into. This includes my bank savings account earning me pretty much nothing, and my Funding Circle ISA that earns me 7.4% interest and that I can liquidate in about a day, if needed.
Of course I use my British Airways AmEx whenever I can to earn miles, and I use KidStart to earn cashback for my daughter for my everyday shopping including my new smartphone that I bought on Amazon. A nice way to make an unexpected expense less annoying.
0 Comments