Do You Budget for Unexpected Expenses?
When I first met my accountant a couple of years ago, she told me to make sure I budgeted a “contigency expense” in my budget for things like home maintenance. I did not follow her advice. For a year or so, everything was fine as we did not have any unexpected expenses.
But just very recently, we noticed a leak in our basement whenever it rained. We have a finished basement, and hence, we had to rip off the carpet. For a few weeks, we pretended that it was not serious and hoped that it would go away. But the leaks kept getting worse and worse. We had to keep putting towels near the wall where it leaked to prevent the water from moving to the carpets.
To try to solve this problem with the least cost, we consulted lots of friends. We first had a landscaper come and take a look. He looked at it with the eyes of a landscaper. He suggested that perhaps we may want to create a “gradient” in our garden so that the water “flows away from the house”. We had a contracter friend suggest we check our drainage system to make sure there were no leaves clogging up the system.
Finally, we decided to consult basement leak experts. It turns out that we had a leak in our wall and that our basement had no sump pump! To prevent leaks in the future, we had to have a drainage system installed in our basement. Total Cost worked out to be about $5250! Well, that was certainly not budgeted in our budgets. But that was not all as we had to get a carpenter to remove the wooden panels on the walls before work could be done. That worked out to another $1000!.
We decided to get this done with because we did not want any more leaks to the basement. This certainly was not anticipated and it just goes to show that you need to budget for such contigency expenses. But I realized that I was lucky. Another church friend of mine had to fix his roof because the tiles were falling on the pavement and also because the roof specialist said that his roof was not constructed properly according to specs! Let’s just say that cost was multiples of the cost to fix my basement.
Here is what I think we have to budget for in our monthly budget.
1. House maintenance cost – like my basement leak!
2. Unexpected wedding invitations
3. Traffic Tickets!
4. Car breakdown and maintenance cost
It would be interesting to know what other unexpected expenses you have faced.
