I cannot emphasize enough the importance of having a budget. This has saved our family on numerous occasions - nothing comes necessarily unexpected. When something does come up, there should be money set aside for it already. How?
Well, you can start here and get an Excel template to create your budget. When you are puting in the numbers, be sure to account for little unexpected crisis, such as a car repair or vet bill. In other words, when you are computing numbers for a monthly car budget, add an extra $50 or so just in case you need some kind of major repair (or heaven forbid, you have an insurance deductible). Also, take things that come up annually and divide them by 12 to set aside money each month for when that one is due (i.e. DMV fees).
Now, how do you make sure that this money stays where it should? I know that when I have money in the bank, or when it's in my wallet - it is so easy to tell myself that I'm going to replace it - but I really need that one thing at the store! What has worked best for our family is the envelope system. Take several envelopes and label them with your budget needs (car, pets, entertainment, clothing, etc) and simply put the budgeted amount in every month. The key is to only spend what's in the envelope - or less! So, if its time to go back to school shopping for the kids, and there's only $150 in the envelope, then that's all you spend.
Do you have another way that works for your family? Please share!
We keep our emergency money out of our bank account because we have been known to spend the savings!
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