You thought I was going to say plan for the unexpected, right? Nope. I’m talking about all the life expenses that seem to come out of nowhere, but really aren’t that surprising: Christmas presents, birthday gifts, a haircut, new tennis shoes, traveling to attend a wedding, pet grooming, gardening, babysitters, dry cleaning, and so on. Ideally you’d plan for these sorts of costs on a regular basis, but for many people, these costs function as forgotten expenses since they’re not ongoing purchases and not obvious bills—and they can seriously blow your budget.
What you need to do instead is factor the expected into your spending. If you know you generally spend $500 on holiday gifts for family members, set up an automatic savings plan to separately prep for that all year so you’re not dipping into money meant for other things or relying on a credit card. If you and your partner love to throw parties in the summertime, save money specifically for that so you’re not caught off guard by the cost of cheese plates and bottles of wine. You probably already have a good sense of where, when, and how you tend to spend a little more than usual (ahem, Target) as well as expenses that crop up semi-regularly and annually. Plan for them. Worst case scenario, you end up having extra money left over at the end of the year.