I’ve been known to be rather “careful” with my money, which is a polite way to say that I can be cheap at times.  One of the drawbacks of tracking every penny that you spend is that when something comes up that you didn’t plan for, you have to make a decision whether to stick to your budget or to loosen your purse-strings.

Tracking Every Penny

When planning a monthly budget, you take into account your large monthly expenses such as your mortgage payment, RRSP contributions, car payment, groceries, monthly utilities, and insurance.  But not every expense is fixed.  And unless you know exactly to the day that you will run out of household staples like toilet paper or cleaning supplies, some unplanned purchases can sneak their way onto your shopping list.

Not only that, variable expenses come up in other ways too.  Pitching in for an office retirement party or fundraiser, catching up with a friend over lunch, or grabbing an ice cream with your family are all spontaneous activities that are most likely not accounted for in your budget.

And making a habit out of living in the moment with no regard for your budget can wreak havoc on your finances if not kept in check.

Related: Why Budgeting Is Not A Waste Of Time

So how do you avoid financial misery without becoming a miser yourself?

In your budget you should set aside some petty cash for any of those unexpected expenses that do inevitably come up throughout the month.  Decide what you can afford that amount to be and then take this cash out from the bank right after you get paid and keep it in your wallet.

If you spend it all, that’s fine…it was accounted for.  But if you don’t spend it all, throw the left over cash in a jar and save it for a rainy day.

How about the readers, are you also “careful” with your money?  Do you track every penny and sweat the small stuff?

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