This is a question I hear a lot when it comes to money so I figured I may as well give my input.

It happens to everyone.... you're going about your business and something completely out of the ordinary happens.  Whether it's on a large scale like a serious injury, or on a smaller scale like a flat tire, the most stressful part about it is that we aren't prepared for the financial repurcussions. 



So when it comes to how much money you should put aside for emergencies from every paycheck, it's wise to always allocate some money for each emergency category.



My emergency categories are:
Home
Car
Vet
Medical



Home is for anything that could go wrong around the house like a pipe leak.   Car is for anything from inspection to getting a windshield replaced or a tire patched up.   The Vet category is for any kind of vet expense for my 4 dogs be it an emergency or just a check up because one of them has a cough.  And Medical is for me, and to cover prescription medicines.  This comes in handy when I am sick and I have to get to the doctor because I have money set aside for my copay and any medications they prescribe me. 


So make a list of the things that have happened to you or to those around you. 



If you have children, make sure there's a kids fund for medical needs.   And then after you do your budget, and you are setting up your cash envelope system, make sure you breakdown your income and allocate a little bit from each paycheck to go towards each category.  It's easier to do this then to take large chunks all at once, at least for me.  I still put money aside in my emergency savings fund, but I won't have to tape into that when I have money in my other envelope categories too. 



You would be surprised how much the $20 a paycheck in my car fund adds up.  If I go 2 months without any car troubles, I already have almost $100.  That's enough for a tire if I need a new one because mine gets a nail in it.   That's also enough to cover the out of pocket expense to get my windshield replaced.  I know from experience!

What categories will you put money aside for?

Make sure you get your free finance spreadsheets here!

Be sure to join my Facebook group, Fixing Your Finances, to help you with your finance journey along the way. 

Be sure to follow Ask Away on Facebook, Twitter, Bloglovin', Pinterest, and Instagram!

3 Reasons to Allow "Fun" Expenses in A Budget

I get it all the time…the weird looks when I pull out my cash envelope system and root through my FUN envelope.   I do it before I agree to any plans with anyone. 

Read more »

A Look at My Filofax Budget Envelope System

This post was originally posted in 2014 but gets updated yearly.

If you're already working on fixing your finances (whether it's from by being on a budget post or my book), you're likely feeling motivated to create a spending system that works for you.  This is key to taking control of your spending by using cash and finding a way to keep it organized. I've shown off my original Filofax Budget Envelope System and I want to give you the tips to make your own!

Read more »

How to Budget for Unexpected Expenses

The funny thing about this post is that once you get to the bottom of it, you'll see that there ARE no unexpected expenses if you budget wisely! 

Last week I asked my Twitter followers what unplanned and unexpected expenses always end up coming up and throwing off their budget and finances.  It’s quite awesome actually the responses I got, because each one has an easy solution, that I’ve already been doing…. The truth is there really is NO unexpected expenses if you budget for them, and here’s how I do it.

The responses on Twitter included Vet bills, House Repairs, and Car Maintenance.

That’s why in my envelope system, I put $20 away to each, from every paycheck.

If you put $20 away every 2 weeks, in 3 months you’ll have $120 in one of the 3 envelopes.  Can I just tell you it’s an amazing feeling when I realize my windshield wipers need replaced, because I no longer think “Oh crap, do I have money in the budget for them and when will I be able to buy them?”

Now I just look in my envelope, and grab the amount I need.

This also acts as a mini savings per category, so that you don’t have to tap into your main emergency fund as often.  

So, when you go to do your envelope categories, as discussed in my Budget Blog Post, you can think of what things have thrown your finances off in the past (do you tend to get flat tires often? That’s what the car envelopes for!) and then add that as a category.

My Guide to Being on a Budget

This post was originally published in 2013 but gets updated yearly.

 

The feeling of having debt is overwhelming and when you're trying to work on paying it off as one of your financial goals, it can be chaotic if you don't have the other aspects of your finances in order. A major aspect is creating and living by a budget, not to restrict your spending in an unreasonable way but to assign every dollar of your money a job whether it's to be spent, saved, or put towards debt.

Read more »