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LisaNullar
Community Leader

Community Chatter: How do you budget for a planned expense?

We have already talked about our favorite splurges, and how we keep our budgets under control during the holidays, so it seemed like a good time to talk about budgeting for planned expenses.   Whether it is for something fun like a vacation get away, or something practical like a new appliance, it's always better to plan and budget for it if you can, so I asked some of my teammates to chime in on their best budget plans and tips, and here is what they had to say: 

 

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From Sasha: 

Since I will be graduating in 2022 with my MBA, I found it fitting to treat myself to a vacation. After a lot of convincing from my college friend (who lived there) and researching, I have decided to go to the Philippines. Once I got a general idea of the plane ticket prices, the adventures I want to go on, and other factors, I realized that I would have to save a lot of money and I took the first step of opening a traveling account. This account, as the name indicates, would only be used for traveling.

 

Then, the following question would be how much should I save each month. I have seen this template all over social media, but I decided to try it for myself, and so far, it's going well. First, you would write on little pieces of paper any amount of money. My range was between $110-350 dollars. Second, put it in a bowl and whenever you get paid, choose one of the pieces of paper and add it to your traveling account. Once adding it to my account, I place the paper back and shake the bowl up for next time. It is rather fun to see what my pick was each time! My account is growing and I couldn't be happier!

 

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From Michael: 

My large-purchase budgeting strategy involves early and meticulous planning. More often than not, my biggest expenses come in the form of many smaller components. For example, a vacation requires a room, food, gas, and tickets for individual attractions; whereas a hobbyist technology might come un-assembled as several parts, or require many accessories for proper enjoyment. The first step I consider is the “biggest piece”, or component of your purchase that will cost the most, and base your schedule around that. For vacations, I like to ask myself: what time of year sees the lowest ticket prices for amusement parks? What time of year sees the least traffic to the beach (and therefore, cheapest rooms)? As for electronics, when are the biggest sales? You’re never more than 6 months away from either Black Friday or Father’s Day, and these both carry the best discounts you’ll see year-round – so could it wait until then?


Once you’ve decided on a timeframe, the next step is research! For any consumer product or purchase, you can possibly imagine, there’s a community out there somewhere who tracks the best deals and discounts for it. This almost always ends up being Reddit. You may have heard that “there’s a Reddit for everything”, and it’s true. They have forums filled with bots that constantly scan the web for deals on computer parts, sports gear, cheap flights, and much, much more. As soon as you have a purchase in mind, find these communities and check them as often as you can – you never know when you’ll nab a sweet deal.

 

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From Kiala:

When I need to save up for a personal splurge item or a trip coming up, the first thing I do is start paying attention to my Miscellaneous purchases. For me, it's usually some ads I find on social media (because they've learned way too much about my spending habits) that lead to purchases I don't really need. Like another pair of leggings, or some magic skincare serum. Those really add up and lead to more money than I care to share here haha. Second thing I look at is eating out. I have two kids and often we're busy with soccer and running errands, so it's easy to just grab something while we're out. My husband and I started to fill a ziploc bag with snacks like granola bars and crackers to keep in the car. I also started packing good old fashioned PB&Js because they're filling and delicious! That usually can hold us all over by the time we get home. Between those two things, I find my account looks way more robust than before. It's not always big changes but the little things that can make a big impact!

 

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From Lisa:

My budgeting method tends to vary based on how urgently I need the item and how long I have to plan for it, but I think I have developed a system that works well for me.  For example, when I moved into my house, I made a list of things I knew I would want/need to replace in the next few years.  And because I absolutely hate doing dished by hand, my next target is going to be to buy a dishwasher.  The first few months were just doing research and picking 2 or 3 that I like the most.  Once I had that settled, then I set up price tracking alerts for each of them.  I like to use CamelCamelCamel for Amazon purchases, but there are a ton of sites offering price tracking and since I want to keep an eye on sales at Home Depot or Best Buy in this case I set watches on a few different services.  

 

While the apps are keeping an eye on the price for me, I started a separate savings account that I put money into for the day I get that email letting me know the price is where I want it.  I try to put a minimum amount in from every paycheck, and I always allocate at least 25% of any "extra" money I get (like refunds, rebates, birthday/holiday money, etc) to that savings fund.  Right now while I'm working from home, I am using the money I normally have budgeted for gas for my car (which was previously being funneled into my rainy day emergency fund) to go towards this fund, so it doesn't necessitate me changing my budget at all.   But when I start needing to put gas in my car more often, then I'll have to sit down and look at where I am spending my money and might be able to cut a bit to keep saving for my dishwasher.  

 

With a little luck, I can keep the cycle going after I buy the dishwasher - setting up new alerts and starting to save for my next appliance replacement.  I should have a few years of life left on the other appliances on my list, and this will give me plenty of time to work my way through them without breaking the bank. 

 

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What are your budgeting tips?  Let us know in the comments below, we can't wait to hear them.  

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