by Ashley
Disclaimer: I hate to always bring up Dave Ramsey because I feel like a broken record and I don’t agree with everything he says, but….
One thing I always hear from people who call the Dave Ramsey Show is that when they started budgeting they feel like they “got a raise.”
I never understood that. I’ve always had a general budget, but since I’ve really been strict about budgeting, if anything it has felt more like a restriction! It has certainly NOT felt like getting a raise! What are these people talking about?
Well….I get it now.
This month I had in my planner that I needed to go get a teeth cleaning. I searched around for Groupons (which I’ve always used in the past), but none were anywhere remotely near my area so I decided to just call the local offices and ask if they were having any specials for cleanings. I was in luck – the third place I called was having a special for a free, X-ray and exam, and only $39 for the cleaning (this is about the same rate as the Groupon deals I’ve always used in the past). So I snagged an appointment!
Then, I go to my budget spreadsheet I keep (its an excel file on my computer tracking budgeting and current debts), and at first I’m a little bummed. Even though $40 is a great deal for teeth cleaning, x-ray and check-up, its DOUBLE my monthly “personal maintenance” budget (budget is $20). BUT….then I realized I’ve been saving $50/month for dental and vision purchases (my annual vision exam comes up in August). For the first time, I didn’t feel inconvenienced by this purchase and I didn’t have to worry about busting my budget for a necessary health-related expense! I’m so glad I decided to set up my budgeting system in a way where I was putting a little money aside every month for these irregular expenses!
So, we’ll see what happens when I get to the dentist, because I haven’t been in almost a year and I was warned that if my teeth needed “periodontal” something-or-other it would cost more. I’m a little worried, but glad that (1) I took the time to call around and find a great deal, and (2) I actually have money for this expense!
It’s the first time that it really did kind of feel like I got a raise simply by budgeting smartly. Wahoo!
Do you set aside money for these types of “expected” irregular expenses? What expenses do you set aside money for?
I remember Adam one time having this conversation in regard to setting aside money throughout the year for Christmas, but I could also think of many such “expected but irregular” types of expenses that one could budget for in this way.
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
Good for you setting some money aside every month. And congrats on getting that deal – hope there are no strings attached.
We opened Cap One 360 (formerly ING) accounts for these kinds of “irregular” expenses. We actually have about 10 accounts. Some of these accounts are for Christmas/Camp for Kids, Pet care, “irregular” bills (for us this is the 2x/year water bill, 2x/year car taxes, and 4x/year trash bill….and added in this year was for car registration for both cars), “extra” medical (what the $2500 FSA doesn’t cover), car maintenance, and a few other things.
We know all of these things need money over the year, and it became easier to save over the year instead of trying to find the money when the bill came. Now we can just transfer the money and pay the bill.
My concern for you with the dentist is if you don’t have a “regular” dentist, they are less likely to see any changes over time. Just a thought.
Oh, pet care is a good one!!
As a dental hygienist, I would just say to be careful with this type of deal. Just like having a regular primary care physician, it’s best to have a regular dentist who will have your records and may notice any changes as Mysti anysaid. I would also be very wary of any additional dental work they recommend for you if this isn’t your norm. Sorry to lecture 🙂 glad you had the money set aside to pay for your visit
This is my concern also. My first dental experience where I now live was with a ‘shady’ dentist. A huge amount of dental work was found that needed to be done ‘immediately’ so my teeth ‘did not fall out.’ I started looking for a new dentist right then. 15 years later my teeth are still in my mouth.
A good dentist is worth keeping and we moved with our dentist as the dentist has moved office to her own office space.
Great job calling around! One word of caution. I once went a few years without a dentist visit due to finances. When I finally went, he told me I had 10+ cavities! Oh, the horror and embarrassment. How could that be? I had not pain in my mouth? Surely, I would have felt something, right?
I then went to another dentist for a second opinion and he gave me a clean bill of health with ZERO cavities! I hadn’t told him what the other office had said beforehand and asked him to explain how two dentists (with licenses) could say such different things.
He apologized profusely for some of “his kind” and said that some dentists will fill any type of natural occurring depression and call it a cavities. Even worse, some dentists will make stuff up.
Recently there was a 20/20 type show (nightline, Barbara Walters, etc) that showed five or six dentists saying completely different things about a guy who had PERFECT teeth.
My moral of the story, if this new place tries to say you a million kings wrong with your mouth, don’t freak out! Go to another place for a second opinion.
I’ve actually had this experience in the past. A couple years ago a dentist told me I had 2 cavities to fill. I never did the work and at my next check-up (with a different dentist), I was given the “all good.” I hate to say it (and I have friends in dentistry), but I have a deep mistrust of dentists. Its a money-making business and – especially when these types of deals are solicited – I feel like they’re just trying to get you in the door to be able to “find” all kinds of unnecessary procedures. Would this not happen if I had a regular dentist??? I don’t know.
I think it can take some time to find a dentist to build a lasting relationship with and using one of these deals to feel out a new service provider is a good method.
If you don’t have a good feeling about the dentist after this visit, try another one for your next cleaning in six months. I’m certain there are more dentists out there with their patient’s best care in mind than those just looking to make an extra buck.
It can also go another way, because I spent several years with a dentist who was a preferred provider on our dental insurance plan who never did anything! When I finally switched based on recommendations from friends, the new dentist showed me where I had been grinding my teeth at night and worn them down over the years. It was clear all the damage that I had done which could have been prevented with a better dentist.
Great job on the pre-savings! We too have about 10 Capitol One online targeted savings accounts….car maintenance, water bill, tuition, etc……we also have 4 targeted savings accounts for FUN stuff – fall football tickets, and 3 upcoming trips that we are saving for…..so it’s nice to pre-save for the bills, but it’s also nice to have a little fun money saved!
Sounds like you are in serious debt kicking mode all around. Good job! Love that you’ve found a method that works for you.
I disagree with having multiple accounts for saving for expenses, though. It sounds overly complicated.
What works for us is this:
– Add up all irregular, but foreseeable expenses during the year. This includes: car fee and maintenance, pet bills, HOA fees, medical, house home repairs, etc. We’ve kept track on Quicken for YEARS so it was easy to see past history.
– It worked out to about $500 a month on average for any time period I looked at
– So now, I have a $600 line item budget for those types of expenses each month. If any of it is not used for one of those specific expenses, then it goes into savings.
– Twice an expense went over $600. In those cases we were able to combine two months without dipping into savings.
We’ve found that’s easier than keeping track of multiple little piles of money. And, we end up with $1000 on average extra added into savings each year.
I think when you are starting out in “pre” saving, having it all in one line item can lead to over spending for one of the items you saving for. For example, you saved $100 for XYZ bill, but it came in at $120. If you have $300 in the account, you would be more apt to take what you need, and not think about the fact that the $20 has to come from somewhere else. Eventually you end up short somewhere. Once you get better at it, it isn’t a big deal. But in the beginning, the visual nature of seeing it somewhere specific can be helpful.
I totally agree. I am a big fan of having it split into as many accounts as you need. I don’t see any benefit to combining.
Whatever works for you, Mysti, is fine. I honestly don’t care. Just trying to show another way. We’ve never had a problem with our method, but then again we’re not overspenders and have no debt, so obviously we’re pretty good at keeping track of our money. If someone has trouble keeping track of the random, but predictable, bills in life, and if they need the added crutch of separate accounts instead of just managing their money in one pot, then more power to them. 🙂 To me, it is just over complicating life to keep track of dozens of accounts when simple willpower will do the trick. Again, I’m speaking in our case.
I am glad your method works for you. I was just pointing out that in the beginning when you are learning to be more in control…There is an advantage to seeing things in smaller pieces.
However, I think your snarky comment about using it as a crutch or having lack of willpower was unnecessary.
Mysti!
Thanks so much for the reco on the Cap One accounts. I had no idea this existed. I am DEBT FREE other than the house (6 years left) but as a complete OCD person, I love being able to track the separate “little piggy banks” I have out there. I don’t want to have to subtract the “new contact lenses” expenditure from the “irregular but necessary expenditures” account. I want to be able to see all the line items by their specific category.
Me and my awesome dude work 40+ hours a week, raise/train/compete with hunting dogs and then travel across the country racing mountain bikes on the Ultra Endurance series (semi pro in 2012) and don’t want the hassle of tracking everything out of one big “kitty”. (Don’t ask how much we spend on bikes, we’re both sponsored so it helps, lol).
I too am offended by the words “crutch” and no willpower” comments. Please let’s not use this comment forum as an opportunity to bash other’s way of finding peace and keeping track of the day to day chaos.We’re budgeting a new motorhome and vacation home but I sure do love my lists! I write lists for EVERYTHING! If there’s no money in the entertainment fund, we don’t go out to eat! 🙂
I am trying to save some money each month for these irregular expenses, but it sure is hard. I will have my furniture loan paid off in September and I know I should snowball payments, but I’m not sure I’m going to put all of the $150 toward my next debt. I think I’m going to put some of it toward the savings for these irregular expenses instead. I currently have no money put away for car tags and taxes, medical appointments and medication, annual pet exams, etc. These could come and bite me in the a$$ if I don’t get some money socked away for these expenses. I could also use the money for 2 months to finish funding my EF to $1k (provided I don’t have to take any out for emergencies between now and then). Decisions, decisions!
I also do this. It’s a method that Mary Hunt calls Freedom Account. You put money away in preparation for expenses so you feel freedom when you already have that money available. Dave Ramsey calls it the sinking fund. He gives the example of a roof. When he buys an apartment that is 20 years old and he knows it has a 30 year roof, he will put money aside to replace the roof in 10 years. You would get an estimate on how much for a roof, divide it by how many months you have until you need to pay for it, then set aside that much each month. We have a separate account at another bank for these items:
vacation
life insurance
tags, taxes for cars
school sports fees
lawn service (get a discount if I pay the entire year at once)
termite inspection
heat/air condition check up twice a year
norton anti-virus
security system monthly fee
homeowners dues
husband’s yearly engineering license
music lessons
piano tuning
At first it really strains the budget to set aside money for these type expenses but over time it really gives a sense of security to know you have the money for certain things when they come due.
Oh man, that’s a lot of categories! I love seeing how others’ split apart these expenses. Right now are kids don’t have any lessons of any kind, but I could see that being another sub-account in our Capital One 360 savings in the coming years. Also, I totally agree about the last part (“at first it really strains the budget”), and I think that’s exactly what I was reacting to when I said the budget felt like more of a restriction…but it definitely does give some peace of mind and sense of security to know this money is there for when its needed!
Just another thought. If your teeth are in good shape, look for a local dental hygiene or dental school clinic for cleanings. My college had one, and in between visits with my regular dentist, my friends in the program would use me for practice cleanings. I think they charged the general public about $7 for a cleaning. It was a great deal and my teeth looked fantastic!
Ehhhh, I don’t know. I have a friend who just went through school and said she would do cleanings for free for people, but it took 3 separate trips! (and that’s just the basic cleaning). I know I always say I have more time than money…..but I don’t know that I have THAT much time! Of course, this probably varies by school and skill level of the “trainees.”
I think it’s great that you found a good deal on teeth cleaning. It’s a good opportunity to find a local dentist and try them out to see if you like them.
I know you have your dental/vision set aside already, but I would have delayed everything until January. I’d stay laser focused on paying off all credit card debt and unless something is a “dire emergency”, meaning something that needs to be taken care of stat (within 24 hours), I’d hold off. I’d put dental cleaning and vision exam on a list for January. Once your credit card debt is paid off, then I’d take a month or so and knock off all of those expenses like dental/vision that you put off and take care of those. There will be a ton of coupons for dentists and any other service in January since most businesses are slow after the new year. Then, in February or so, you can start on your next debt goal. I would still continue to save your $50 or whatever for these dental/vision expenses.
Also, check out the Amazon Local app for more groupon like deals in your zip code. I downloaded it yesterday and it was pretty good.
Also, and this is not meant to be snarky but more of a paradigm shift comment….it is easy to get excited to spend money to celebrate your big paycheck and the consensus was that $100 wasn’t a big deal to many people however for your dental exam, you searched for a deal (which is good!). I would rather you spend $100 on the dentist and $39 on the celebration. Taking care of essentials is boring but at this stage of the game, where prioritizing debt is essential, it would trump the celebration. (I also recommended a low key celebration at home with take out and a larger celebration with the credit card payoff. )
As a general question for those who have ING Savings (Now Capital One), are you creating sub-accounts or separate accounts for your irregular expenses? I have ING for my emergency savings but I keep my irregular expenses in a separate account at another bank…I’ve tried setting up “sub-accounts” but I wasn’t sure how to do it aside from creating a “new savings account number”. I want to have my one account with multiple sub accounts. (P.S. I opened an ING Checking when they offered $125.00 a few years ago as an incentive, lol.)
when you open the sub accounts in ING (cap 360) it gives you a new account number – but my understanding is from their point of view – it’s 1 account.
I have about 7 for different categories!
Each Cap One acct has its own number. ..but you as the owner see them all together. You can transfer between them if need be. For acct purposes. ..There is a summary that shows them as a collective.
Thanks for the tip on the Amazon Local app – I’ll have to check that out!
I love that you call these types of expenses “expected but irregular”. I’m glad that you have benefited from planning ahead and saving the money for dental bills. I think that this is one of the most important things you can do to keep your budget on track. And now – you’re in great shape after paying the bill.
Good for you!
Not a comment on your content, but on the ad in today’s post. I really don’t want to have to answer survey questions to read the content of the blog. It was really off-putting.
Yeah, I actually have no control over that stuff but I agree it is off-putting (I even have to do it when writing/editing posts)….that being said, the owners do what they have to in order to keep the site free and in working order.
My husband and I actually have a few small savings accounts for various upcoming or unplanned expenses. For instance, my husband is saving for lasik surgery that’s one account, we have one account just for car and renter’s insurance, and then there is a savings account that has $500-1000 just for unexpected crap that happens. On top of that, there is one final savings account and that holds our emergency fund and we contribute to it automatically each paycheck. We don’t pay too much attention to it so we don’t get the urge to spend it all.
I am sure this sounds complicated, but it is a system that works for us and certainly has come in handy over the years.
I would LOVE to have Lasik surgery! It’s just a “pipe dream” at this point (still really working on paying down debt), but I think I might start a savings for that at some point!
Just so you know on the Lasik – I had that done 5 yrs ago, and it only lasted 4 yrs. I now need glasses/ contacts again. So consider the long term reality that it isn’t guaranteed to be permanent, and the possibility that you can come down with some of the known side effects – like dry eye.
i really encourage you to try the Capital One multiple savings account method. We don’t have much cash flow, but I do my best to save a little every month for expenses, both regular and irregular.
Insurance – we save money every month in one account for auto,home and health insurance – and it is also debited from the same account so that the insurance companies do not have our main account number
Car registration and taxes – I looked at what we paid, divided that by 12, and am saving 1/12 every month so this summer we will “have the money in stock”
Pets – we save the money every month for their expenses ( cat litter, food etc) the next month, but this helps me keep track of how much we’re spending.
Vacation – this is a very tiny amount right now, but I like keeping the money separate. We know this is the only fun travel money we have, and think carefully on how to spend it.
Extra utilities – I kind of do my own budgeted system. I calculate out an average cost per month, and then deposit the difference between this amount and the bills – into this account. The surplus will be used for high summer bills
We have more accounts, but really, your accounts are highly personal. The main thing is thinking ahead to expenses that show up every year and trying to save a little every month so it doesn’t have to come out of thin air.