Adjustments – Life

A Budget or Spending Plan should always make space for adjustments. Life happens and this needs to be accounted for.

Depending on what stage of the financial lifecycle you are in, life can throw a spanner into the works at any time; an unexpected purchase – new electronic product because the old gave up OR the need to give to a friend, family, charity, church or stranger.

As much as I try and pre-empt my budget for the year, there are months that the Budget/Spending Plan does not work. I may not want to touch my Sinking Funds, therefore, will modify some aspects of the Spending Plan to cater for these out-of-the-blue expenses. These may not necessarily be an emergency however, may still be needed OR I have considered it a need.

When you are paying off debt and have not yet built up a 3-6mths Emergency Fund or Sinking Funds, it is important to:

  1. Clearly identify those ‘Life Adjustments’ as needs or wants.
  2. Keep paying the minimum on all debts/loans etc. I wouldn’t recommend deferring payment on a loan to get a new phone unless that phone is needed for your job OR the main means of communication for your family.
  3. Cut down on fun money for a few months to cover the Life Adjustment.
  4. Consider increasing your Emergency Fund pot.

Never give to be liked or to prove a point.

Give because you want to.

– Praus Life Finance

For this week, review your ANNUAL Budget or Spending Plan and ensure all expenses for the year are included.

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