Earlier this week The Frugal Queen asked if we have really budgeted for everything. I'd have to answer no as I base the year's budget on last year's expenses and known increases in things like health and car insurance or property taxes.
Some people keep separate online account "envelopes" to save in advance for the rare and/or unknown expenses that pop up be it car or dishwasher replacement, vet expenses or whatever. We keep general savings and investment accounts.
This month's unbudgeted and unexpected/unplanned expenses have me wondering if that is the best approach once we are living on retirement income. Just yesterday it was a new car battery for our older car - $166 that was not included in the annual servicing & licensing budget. We do budget for poodle princess's monthly shot, meds, annual exam & grooming, but this month she had lots of tests and changes in meds and food - $718 and a substantial financial gift to elderly relatives who are struggling financially.
I have no problem with any of those expenses and am happy we can afford them. However, I didn't really budget for any of them and I'm wondering if there is a change that would be helpful to try as I know our first year or so of living on retirement cash flow is going to take lots of adjusting and planning.
Please share your ideas and experiences!