Common Unexpected Expenses to Include in Your Budget

As with many other questions on this foram, this is directed at cash flow and the standard answer, especially for those who own a home, is to have a cash and/or liquid reserve of no less than three months and no more than six months. It's important to bear in mind that these are simply rules that we've used for many years. Your personal cash flow should dictate a more concise answer and based upon current market conditions, keep in mind that many of us feel that "cash is king". Cash does not earn much in the form of interest at the present time but, it also doesn't go down in value if the markets determine that it is overly priced. When dealing with a personal residence and family, being conservative with these funds is critically important. Prepare your own cash flow of income and expenses and make a distinction between those expenses that are discretionary and those that are fixed. This should help you put together your own plan and guide you to a conclusion that make sense for you and your family. Good luck

You should budget 1% - 4% of your home's value for maintenance every year. That means if your house is valued at $400,000, you should save $4,000 to $16,000 per year for things like lawn care, home upgrades, and emergency repairs for plumbing or electrical issues.

Other methods to determine how much to budget for home maintenance include the square footage rule and the 10% rule.

• Square footage rule:This rule requires...

You should save at least 20% of your income each month, according to many financial experts. This number also aligns with the popular 50/30/20 rule, which requires you to put 20% of your income toward savings, while 50% goes to your necessary expenses and 30% is used for discretionary spending.

Saving 20% may not work for everyone. In fact, the current savings rate in the U.S. is 4.6%, according to the latest data from the...

An emergency loan is a lump sum of money a borrower can get quickly to cover an unexpected expense, like medical bills or car repairs. Personal loans are the best type of emergency loan, but you can also use home equity loans and lines of credit, credit cards, and other borrowing methods to cover emergency expenses.

The best emergency loans are from LightStream because the company offers funding as soon as the same day you apply, loan amounts of...

To budget for variable expenses, you should first make a list of your expenses that differ from month to month, such as food and gas, then add up what you paid for each in the past year and divide that amount by 12 to find the average monthly cost. You can then include the average for each expense in your monthly budget.

How to Budget for Variable Expenses

1. List your variable expenses for the past year. 

Variable expenses are costs that are hard to predict since they don't stay the same every month. Some examples of variable expenses can include:

• Groceries
• Dining out
• Gas
• Clothes
• Entertainment (concerts, sporting events, movies, etc.)
• Travel
• Utilities
• Health care
• Car and home repairs

2. Add up the amounts. 

Add up how much you paid for each variable expense over the course of the year. You can check your credit card or bank statements for the past year to get the details.

3. Divide the total amounts by 12.

Once you have the total for the year, divide that amount by 12 to know how much you should budget each month for each expense. For example, if you spent $5,000 on groceries last year, you should budget about $417 a month for them in the coming year.

4. Include the amounts in your monthly budget.

Add the average monthly amount for each variable expense to your budget along with your other expenses. You can use a spreadsheet or a budgeting app, like WalletHub, to do this.

5. Review and adjust if needed.

Regularly review your budget to make sure you are not spending more than what you budgeted for each variable expense. If you are, you will either have to cut back spending in that category or allocate more money to the expense.

Finally, remember that variable expenses are just some of your monthly expenses. You will also have fixed expenses, such as your mortgage or insurance premiums, that you will need to factor into your budget. To learn more, check out WalletHub's guide on how to budget for fixed expenses.

You should spend no more than 80% of your income on your expenses, with 50% going to your needs (like housing, food, and utilities) and 30% going to discretionary spending. If you allocate the remaining 20% to savings, you'll be following the popular 50/30/20 rule. Even if you use different budget percentages or categories, keeping your expenses below 80% of your income can allow you to save for the future and help prevent you from...

Some of the best ways to save money on a tight budget include avoiding impulse buys, using free budgeting tools, comparison shopping, negotiating bills and automating your saving. These steps prevent you from paying more than you have to and help you save money for more important things.

Make a Budget

Best Ways to Save Money on a Tight Budget

1. Avoid impulse purchases

Buying items that you don't need on a whim...

You should keep three to six months' living expenses in your savings account, plus a bit extra. Most experts recommend saving enough money to live on for the amount of time it would take you to find a new job if you were to lose yours and adding a little more for emergencies.

How to Determine How Much You Need to Keep in Savings

1. Split your purchases into two categories: fixed and...

The best credit card for emergencies is a no annual fee Visa or Mastercard with a fairly high spending limit, like the Wells Fargo Active Cash® Card, so you know you'll be able to handle a big expense if need be. Visa and Mastercard credit cards are the best because you can use them anywhere. Having no annual fee (or at least a low one) is important since you probably don't want to pay for a card you won't...