financial discussions with the girl next door

How Do You Deal With Things That Aren’t In The Budget? February 9, 2009

Filed under: Uncategorized — girlnextdoorfinance @ 1:13 pm

If I want to apply to graduate school soon (I’m starting to go back and forth a lot on this), I need to take the GRE as soon as possible. The cost of the GRE general test is $140. I haven’t budgeted for it, since I’ve been wishy-washy on whether I even want to apply to this program. I feel like I should take it regardless, since even if I don’t apply right now there is a relatively high likelihood that I will apply within the next few years, and I’d rather know now what kind of scores I have.

What do you do when something comes up that you haven’t budgeted for? I have plenty of money in my savings/emergency fund to pay for it, but I’m really reluctant to withdraw from that when something isn’t a true emergency (plus I just took out $1700 to pay off my car). Right now I’m putting over half of my paycheck into savings. I could just put less into savings when I get paid next (on Friday), but I don’t want to change my savings routine (if I can avoid it).

Also, I know that my expenses are a little odd right now since I spent so much extra money in January (car repair, textbook, etc.). I put most of my extra expenses on my credit card (don’t worry, it’ll be paid off before it incurs any interest!). So, now I’m also budgeting in higher credit card payments. I could put the expense of taking the GRE on my credit card and just budget the payment of it from one of my next checks. I really don’t like getting too far ahead on that though – I already have about $300 worth of purchases on my credit card that need to be paid off within the next month to month and a half. This may sound like a paltry sum, but I try to keep my total current purchases on credit below $500 (I set myself a low maximum balance so I can pay it off without too much impact on my savings, if necessary) and adding another $140 will put me very close to my self-imposed limit!
So, my options are:
1. Pay for GRE from savings
2. Pay for GRE with credit, pay it off over the next month or so (before interest is charged)
3. Don’t bother taking GRE, put off grad school for a while longer

What do you do when you have expenses occur for which you haven’t budgeted? How do you handle these expenses? How often (and for what reasons) do you withdraw money from your savings or emergency fund? Any suggestions about what I should do?


One Response to “How Do You Deal With Things That Aren’t In The Budget?”

  1. Shaun Says:

    I always go either cash or wait. If it’s an emergency and cash isn’t available, I use credit. I’ve made sure that my emergency fund is larger than what I’ll need to keep my current standard of living for about a year.

    I know, I’m a paranoid person. ;-)

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