4 BIG Reasons Why You Never Escape Unexpected Expenses

why does it feel like every time you make a little bit of traction with your money you are hit with another unexpected expense it's like life keeps happening life keeps getting in the way and all of a sudden we are leaking money in this video I'm going to be sharing exactly why you seem to never Escape unexpected expenses and stick around to the end where I'm going to share how you can get out of this situation for good hey guys welcome back to the channel I'm your host Justine here we talk about all ways to help you Achieve Financial confidence Crush debt that leads to more fund and fewer payments we're talking about never being able to escape the unexpected expenses situation so the first reason why you seem to never escape the unexpected expenses is you don't have a separate savings account for emergencies co-mingling money meant for savings with money that you are spending on a monthly basis means you can't keep track of what money is for what so you could very well in a particular month overspend in your budget on certain categories and start dipping into money that was meant for savings now you don't have any clear organization or structure what is meant for your basic monthly living expenses what you're spending day in day out and what is meant for True unexpected emergencies the next reason is you treat everything like an emergency most months you are dealing with some sort of a financial situation that needs your immediate attention maybe it's bad news from a dentist you need dental surgery uh perhaps it's your dog inquired a mega vet bill that you all of a sudden have to pay for for their care maybe you got a flat tire whatever it may be all of a sudden you have to deal with it immediately because if it doesn't get handled right away you either lose your pet you don't have a means of transportation you have a physical ache in your mouth where prevents you from eating it has to be met with immediate action when you're treating everything like an emergency nothing is pre-planned or thought out so this is the difference between reactive budgeting where we are reacting to what's happening to us week by week versus proactive budgeting I'm thinking ahead this is most likely going to happen I am like pets get sick we are going to have vet bills how can I proactively budget for this is it creating a sinking fund or setting aside a monthly savings amount every single month I'm putting in 100 bucks 50 bucks so that I can at least Shore up some sort of funds to make sure that this doesn't happen to me again and I'm proactively thinking ahead I have a car maintenance fund so that I know when cars get flat tires inevitably I just dealt with this 2 months ago I got a nail in my tire unexpected was devastated I'm like how does this happen to me um duh it it happens to everybody it happens to everybody I had the cash ready to go because I'm planning ahead knowing that cars require maintenance knowing that hey sometimes you run over a nail and you deal with it and I didn't sweat it because I had the funds in place so getting you to go from reactive budgeting to proactive budgeting is really going to help you get over this treating everything like an emergency situation tell me in the comments what is one common unexpected expense unexpected that you keep dealing with that keeps being on repeat and is derailing you from other things that you want to do another Mega reason why you cannot Escape unexpected expenses is because nothing is written down keeping things in your head not actually putting things on paper can get really really messy or if you have a habit of my budgeting method is just simply checking my checking account balance to see if there's money in there to spend that is not budgeting if you are not actively telling your money where to go this is where I often will say things especially with my one-on-one uh coaching clients is money is a ball of energy right okay so money is energy because there's a constant flow in and flow out if we are not actively managing that energy and telling it where to go it's going to go wherever the hell it wants okay we want to make sure that we are giving money Direction and giving that energy direction if you need help prioritizing that and figuring out okay where do I need to put my money first check out my minseries Millennial money moves this is a short and sweet simple solution to help you figure out exactly what next financial step you need to take and in what order very easy video series for you to digest and it is available for sale using the link below and you can never keep up with unexpected expenses because your monthly income can barely keep up with your day-to-day normal expenses so if you can't avoid the unexpected right now it's probably because your monthly income can't even cover the regular Necessities even when you hit a month or you hit a period in the month where you're like ah I've got I've created a little bit of Sav for myself you get an email notification that says your car insurance is due in 3 days and now you're stuck and you're scrambling and then you're dealing with this paycheck to paycheck situation so here's what to do instead to get yourself out of this this NeverEnding hole of unexpected expenses and the waves just keep coming down on you like here's how to stand up on your surfboard of finances so here's what to do instead one way is to increase cash flow flow whether you are reducing expenses this is where the budget comes into play knowing exactly where your money is going especially if it's going to unused unwanted subscriptions or maybe it's going to costly things like uh house cleaner uh lawn care just things that you could temporarily reduce or pause this is a great way to increase cash flow look into working overtime many of the people I work with end up working over over time to help them get out of this slump even if it's temporary or just picking up a side hustle when I was going through my debt-free journey of paying off $35,000 in debt I was absolutely s hustling I was a freelance writer I was working overtime I was figuring out ways to cash flow and increase my income as much as possible the next thing that you can do to get out of the unexpected land is to write down all of your monthly income and expenses I say it a lot on this channel I find myself on repeat but I figured the more times I can tell you this the more that you'll absorb it and say like oh I actually am going to do the budget this time because I heard Justine say it for the 56th time writing down all of your income and expenses is just going to help you keep things organized I have a whole free budget toolkit that is going to keep everything on one file for you to figure out okay this is where I'm at but if it's not a spreadsheet what I want to tell you is do what works best for your brain if that's truly an app and you can stay consistent with that use the app if it's a financial Journal hell if it's even a whiteboard on your refrigerator and you can stay consistent with that because you are seeing it visually every single day when you walk home in the door use that I want you to prioritize consistency over just some fancy tool now Pro tip here is to start all by tracking one single expense category for example you could do this for your grocery budget if you kind of have an inkling in the back of your head that you spend a lot of money on groceries here's where you can track that day and day out every single time you go to the grocery store for the next 2 weeks for the next month write that down whether that's in the spreadsheet or you're using your app this is a way that you can start tracking an expense that you know you spend a lot of money on every single month to create the awareness even better awareness is saving your receipts having that physical receipt is going to show you oh my gosh I've gone 1 2 3 4 five times and we're not even 10 days into the month this is a problem how can I address it let me go through the receipts and see what I bought next is to set up a starter emergency fund a starter emergency fund you're like what the hell is that a starter emergency fund is an emergency fund equal to 2 to 3 months of basic living expenses your basic living expenses not including your debt payments this includes rent or a mortgage payment any in all utilities including electricity gas water internet uh your cell phone bill groceries in basic toiletries that you are truly buying from a grocery store not takeout food not restaurant food we're also including Transportation costs anything car related such as car insurance gas car registration or public transportation fees if you use a bus or a subway system to get you to and from work and other places ideally you are going to have this set up in a high yield savings account separate from your checking we always want to keep the starter emergency fund separate from your checking account this is where we start dividing and conquering this is where you see that clear money set aside for emergencies now high yield savings accounts earn much more interest than a traditional savings account traditional savings accounts are parked with big Banks if you want to hear me just dish out on the three worst banks in America I will leave a link to that video up here in the cards for you to check out their awful they're not they are not Banks you want to go with in terms of parking your starter emergency fund now I personally like using high yield savings accounts I use Ali bank there's plenty out there you want to make sure that they have really good interest rate and pro tip is to relabel that savings account to your emergency fund it could be your fudge fund it could be your oh fund it could be the unexpected is expected fund whatever it is I find that labeling your savings accounts actually helps you and derails you keeps you from pulling that money out for anything else other than an emergency and you'll also want to stop treating the expected as the unexpected so I kind of mentioned this before but things like car maintenance home repairs vacations think about the last time you're like ooh I really need to book that flight this week and and how am I going to do this I I'm I'm just going to scramble up the funds really quickly it's time to set up some syncing funds where you are saving a specific amount every single month into a separate savings account you can actually organize this in a high old savings account into a buckets if you're using Ally you can use buckets and be able to set aside money for those particular funds so if you're not sure how much you should be setting aside for these particular savings goals then it's a good idea to go back and do an audit of what you've spent on that particular goal or that particular expense in the past so I'll give you an example um medical bills if you're paying that out of pocket a lot let's go back and dig in our Bank trans transactions credit card transactions over the last 3 months and then see exactly how much were related to medical bills and then take an average of that that's what you can start take that average and that's what you can move into savings every single month you can do this for vet bills car insurance car maintenance see how much you're going to do a spending audit so the spending audit is looking back at your past spending over the last 3 months whether that's opening up your bank account or your credit card account looking through those transaction statements and figuring that out then you can start setting aside money for that particular expense and proactively budget for it now two big foundational Finance priorities that often get skipped or missed or overlooked is the budget and the starter emergency fund think about it if you had these two things locked down and dialed in do you think you would be able to handle the next unexpected expense I have a hunch that yes you would be able to you'd be able to combat it quite easily no stressing no more of that I'm leaking money somewhere feeling it's all taken care of because you have it written down and you have a fund in place for the unexpected if you are stuck on trying to figure out your next financial priority check out my mini course Millennial money moves where I'm going to walk you through in a very quick video series plus you get an interactive decisionmaking quiz where depending on your answers I going to give you the result that you were looking for to help you make that right next financial step if you like this one give it a big thumbs up don't forget that and I will catch you in my next one [Music] o [Music]