Wednesday, October 8, 2008

When the Budget Goes Off The Rails

Recently, a few big whammies hit us, one right after another. First, I got pregnant. While I was thrilled, after a long haul with fertility issues, it definitely took me by surprise. I honestly wasn't expecting a positive blood test, so when it did happen it startled me. That was followed by the items I chronicled last month on the costs of maternity. Right on the heels of those changes came a forced pay cut - that I was informed of on my birthday, no less. A month or so later my car went dead on the way home one night. Then our washing machine died a sputtering, water-filled death this past weekend, and off to get a new one we went (it wasn't repairable).

Added together, along with some cost overruns on house projects, such as: our dangerously unstable barn came down this summer, but the dumpster rental cost more than originally quoted, and rising costs of fuel, food, and other was a tough few months.

I have to admit here, I hate surprises. Hate them. My idea of a personal hell is being thrown a surprise party. So you can imagine how much I like surprises that cost me money. Especially since we had already been working to squeeze in a few things that hadn't made it into the spreadsheets.

And surprises when I have an unpaid maternity leave coming in 5 months? I'd rather have a root canal, thank you very much. Without painkillers.

But the only way past a budget derailment, or series of them, is through it. So we fixed my car,which was fortunately not a costly repair, adjusted to the pay cut, and replaced the washing machine (I am secretly thrilled about my soon-to-arrive front loader, but still grumpy about the unplanned spending). We adapted to the higher grocery prices by compromising both on the budget and in what we bought.

We cut in other areas to compensate. And where we couldn't, we adjusted our savings expectations, and I worked some extra hours - which, given some upcoming deadlines, was necessary anyway. But instead of that overtime money being 'squoosh' in the budget, it started to make up a shortfall.

Watching more money go out than come in for 3 months straight has been painful. I was relieved when October 1st came, and we could start a new month. Of course, then the washing machine died, but we'll still be adding to savings this month, not taking from it. Sure, we had the money to take care of all the items I've listed in cash, which was nice. But it stung to watch all that hard-earned money go out the door.

Every now and then, life throws us surprises. Sometimes they are wonderful - meeting Mr. or Ms. Right is a nice kind. A longed-for positive pregnancy test. Realizing that, yes, in fact you can afford your first home, and then spending the first night in it, as just happened in the life of a friend of mine.

Sometimes, though, not so nice. These things happen to all of us - and for some odd reason, they seem to group together in short periods of time. Maybe it is that bad things happen in threes, as the old saying goes. Maybe we just notice the bad stuff more once one bad thing does happen. For whatever reason, I've noticed they pile up when they do come.

So what do you do when life throws your bank account a curve ball? Plow through. Deal. Get it - or all the its - over with. Repair, replace, as best you can. The sooner it's dealt with, the sooner you can move on.

Oh - and plan for the bad things. That's why you have an emergency fund, right? If you don't, you need one. See, bad things happen. To people as nice as you and me, even. Jobs get lost, cars break down, washing machines spring a leak and flood all over the basement on a Saturday afternoon, just as your tired, pregnant self is heading up for a nap (that never got taken). If you have a 10 year old car like I do, plan for it to crap out on you or need more maintenance than a new one. Plan for 1-2% of your home's value to be spent in maintenance and repairs every year. Most of these things, while never happening at convenient times, are truly predictable.

And then, after the mess is cleaned, and the repairs and replacing are done, breathe a sigh of relief. Sure, your bank account will be smaller than you would like. Maybe close to empty even. But because you saved for things to go wrong, you probably aren't paying off a high interest credit card as a result.

Things happen. You can't plan for everything. But if, like the Boy Scouts, you choose to be prepared for the eventuality that something, sometime will go wrong, when it does you'll be grumpy, but not broke and grumpy.

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