If you haven't read my thoughts on reverse budgeting already, you should start here.
Let's assume you've done your own reverse budget.
Perhaps you've made some necessary adjustments and become an expert at tracking where your money is going each month.
But you're still struggling with one problem...
What about all the one-offs that don't fit nicely in a category?
You've done the work and yet you still feel like things are out of your control.
Well, that's because they are.
There's an old Yiddish proverb that says, “Man plans, God laughs.”
Part of using a budget to manage your cash flow is leaving some room for the unexpected.
And if you have children, you know this reality very well!
There is always an expense that you hadn't accounted for.
So what's the solution?
Your budget might need a buffer.
This is not me giving you permission to throw your hands in the air and wave them like your budget don't care. Your buffer needs to be meaningful and become a part of your budget.
Here's how you can quickly create and add a meaningful buffer to your budget:
1) Look back at your spending for the last couple of months.
2) Total up all your spending outside of what you had already budgeted for
3) Divide your non-budgeted expenses by the number of months you reviewed
You now have a monthly buffer amount to include in your budget.
When you build a buffer into your budget this way, it's not a cop out.
It's a reflection of the reality that unplanned expenses happen.
You can take the stress & anxiety out of your budgeting by giving yourself some room to breath with a meaningful buffer.
Need help budgeting? I help walk families like yours through this process all the time. Book a time to chat and we'll get started.