It doesn’t matter how committed you are to budgeting, there are times when the unforeseeable waltzes into your life and poops on your carefully made plans. When Suzie Q wrote to me to say she had three months’ worth of emergency money, a car fund, a kids’ fund, a yard fund and a travel fund all set up, I could see the frustration oozing from between the lines as she told me about the out-of-the-blue, unplanned expense that was threatening her carefully constructed financial safety net. Poor Suzie. Life happened and it really had her spinning.
One of the best ways to cope with the constant financial challenges life tends to throw at us is to with a Curveball Account. This is not your emergency fund, which you need for major disasters like illness, job loss, disability or death. Your curveball account is a slush fund from which you can draw when unexpected expenses come whizzing at you at sixty miles an hour threatening to throw your budget totally off track.
Whether you deposit a little or a lot into this account every month, it can be a real budget-saver. Move all the money you “save” by shopping smartly using coupons or price-matching into this account right after you haven’t spent it and it’ll grow pretty quickly. Aim to have between $500 and $1,000 set aside (you choose the amount that you think will work best), and the next time your son breaks his hockey stick or the car needs a repair that’s not covered by what you’ve saved so far, you’ll have the means to cope without turning to credit.
If the expense is a whopper — in Suzie Q’s case a huge house repair — when you simply haven’t accumulated enough in your maintenance account, you may have to borrow from your other planned spending to pay the bill. Then you’ll have to trim your spending so you can crank up the automatic transfers to your planned spending accounts to get them back to where they need to be.
Under-spending will be the new name of the game: say “Ta ta” to all those things you routinely buy each day. Use the points you’ve accumulated on your loyalty cards for things that you would normally have to buy so you can use they money you’re saving to start or re-boot your Curveball Account. Give up a vice for one month: no wine, no beer, no ciggies, no candy-bars, no potato chips, no (insert your weakness here). Once you have the amount that you think you need in your Curveball account, you can go back to your vice… if you really want to.
Read more: Why Budgets Fail?
Another great way to fund a Curveball Account is to sell something. Y’know that sewing machine you never use, that guitar you haven’t played in a decade, that exercise bike that’s turned into a clothes hanger? Wouldn’t you rather have the money in a Curveball Account so you’re not twisted in knots every time something unexpected pops up? Have a garage sale, take your stuff to a consignment shop, sell it on e-bay or Craig’s List. Bank the money and what your stress lives fall.
Trying to keep up with your socializing can be a real downer if you’re trying to stay on a tight budget. It can be a real struggle not giving into to the pressure to go out for dinner, see a movie or attend a shopping-party. Friends and family aren’t trying to mess with your budget, they just want to have fun. Yes, it can be frustrating to watch your pals as they head out for a day of mall grazing. Know what? You can still play. You just can’t pay. Make up your mind to window-shop. Have a good meal before your dinner out and stick with an appetizer and dessert, or go dancing and have fun without the libation.
The cutting back won’t be forever; just until your curveball account is to the level you feel is comfortable. And taking a break from spending to rebuild a curveball you had to use will be dead easy because you’ll have seen just how much a relief it was having it in place.