Start a "reserve fund" as part of family's budget to handle unexpected expenses
BLACKSBURG, Va., Jan. 18, 2006 - It is often a fact of life that there will be unexpected expenses. The trick might be to expect that something will happen and so put away some money designated as a reserve fund.
Make it a part of a your personal budget to put away a set amount every payday and call it the reserve fund, said Celia Hayhoe, Virginia Cooperative Extension family resource management specialist at Virginia Tech and Certified Financial Professional.
Some expenses come up all the time. Plan for things such as birthday presents, school clothes and supplies, club membership dues, as well as "real" bills such as insurance premiums and taxes. "There are major expenses that are regular bills. It is just that they come in once, twice, or four times a year. They should be regular budget items," Hayhoe said.
Use a reserve fund for the unexpected: new automobile tires.
If you get an income tax refund this spring, use it to start your reserve fund. Or try to cut back on some discretionary spending such as eating out or going to the movies, or you may postpone a trip or give up expanded cable service until you can set aside enough to start the reserve fund.
Virginia Cooperative Extension has several publications on personal finance and money management. Your local office can help you find the ones best suited to help you meet your budget plans. The local agent can also help you find a volunteer financial counselor or a consumer counseling service to help you get your budget on track.
Contact: Michael Sutphin
Writer
Communications and Marketing
College of Agriculture and Life Sciences
Virginia Tech
(540) 231-6975
msutphin@vt.edu