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Friday, June 13, 2014

New Budget Category

Lately, I have realized that I need a new budget line item to replace things that are broken beyond repair.

For instance, my cell phone is almost 4 years old and still going strong but, it is a matter of some time when it will require a new battery which is no longer available. New cell phones are expensive so it would be nice to have a fund saved just for these types of expenses. Small expenses such as a broken hair dryer or a new kitchen gadget usually comes out of my free spending+grocery budget but a cell phone is expensive.

I have a fully funded EF so, may be I should set aside a much smaller say USD 1,000 fund for replacing broken items? Sounds like a good idea but managing so many small funds is a lot of work. I am thinking of changing the design of my budget a little. At the moment, I have an EF and a savings fund which will be allocated to new kitchen, new car and a US road trip not in that order and a small investment basket apart from my retirement account. There also lots of categories such as car related expenses, taxes, insurances etc. May be I should set aside the savings as a lump sum amount and ear mark certain percentages to different funds... I don't know... I should go work on it a little while...

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