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Swing and a Miss – Our Curveball Account

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When Your Budget Throws You a Curveball

CurveballAccountSarah and I have a budget, this should come as no surprise to any of you since we definitely practice what we preach and we are huge advocates of having a household budget in place along with tracking our spending.  Our current budget has 35 categories, each of which gets a small piece of the pie when we get paid.  The number of line items we have in our budget changes as our life changes (we encourage you to revisit your budget at least once a year and/or whenever your financial situation changes).  While our budget has line items for things like insurance, mortgage payments, groceries and a pet account to cover vet checkups, food and litter – there is one line item that we think is important for every single budget out there, the curveball account.

The Curveball Account

In short, a curveball account is there for whenever life throws you a curveball, when things are moving in the direction that you want and then changes trajectory on you.  This is different from your emergency fund that should only come out in the event of an actual emergency.  This isn’t even for if your roof caves in – if you are a home owner we would encourage you to make sure you have a home repair budget and insurance to cover major repairs depending on your situation.  The curveball account is to cover those items that come up the leave you saying “Oh no, we forgot about _____!”.  If you’ve done a spend analysis, which is a great way to lay out what you typically spend you’ll have a pretty good idea of what categories you need to put money aside for.  Generally speaking you won’t forget the big things like your mortgage or rent payment, your cell phone bill or your property taxes.  Perhaps the best way to describe the curveball account is what prompted Sarah and I to include one in our budget.  It was a chilly November Saturday morning when Sarah and I sat down to do our weekly bill payments.  While going through the credit card statement there was one item that slapped us both in the face – the annual fee.  I personally stay away from any credit cards that have an annual fee – but they can definitely have their advantages especially with reward miles or cashback.  This particular card has a modest, but completely forgotten about annual fee.  We had enjoyed the advantages of the card, since the extra reward miles paid for a first class flight for 2 to Las Vegas for our vacation that year.  Now it was time to pay the piper, and we didn’t have a line item with money aside to cover the cost.  We didn’t run away flailing our arms in the air in panic, we are careful with our money and had been diligent enough to have some reserves in another line item to cover the cost.  No harm, no foul.

How Much Should I Put In?

This is a very specific question that will be different based on your financial situation, it would be impossible to put a specific number or percentage on it that would apply to everyone.  For example if you have kids you might need to have money aside for school lunches or field trips vs a single person would not have to worry about that.  What we recommend is that the curveball account line item be prioritized between your needs and your wants, since it could be needed for either.  As far as the amount, don’t get crazy with it – this is money that you are going to sock away into your savings account at little or no interest and if you are smart cookies, may never need to use.  Money without purpose is money wasted, so a good idea may be to put some money in until to reach a couple of hundred dollars and then reallocate that money to a more important fund that will actually be used (like a retirement contribution or mortgage prepayment).  Should you run into a situation where you get a curveball thrown at you and you need to use the money in the account – this will be your signal to do a budget revisit since you have a new line item to add for whatever thing you forgot.  Goes to the old adage…fool me once…you get it.  Basically don’t make the same mistake twice.

Is This REALLY Necessary?

Of course a curveball account is an optional item to include, and definitely a nice to have over a need to have.  It wasn’t something we have had since the beginning of our budget journey.  If you don’t have a few extra dollars to throw to the side for unforeseen expenses, you may need to do some borrowing from other accounts within your budget to cover the costs if something comes up.  Also, if you’ve been running on a budget for a few years with no changes to your financial commitments you probably have everything accounted for and you might not need to worry about a curveball account at all.

I Don’t Have a Budget!

Well if you are operating without a budget, you will likely not have use for this very specific budget line item.  Essentially your entire income goes into a curveball account that you use for curveballs, fastballs, sliders and even the occasional knuckleball.  As long as you aren’t striking out, your set up is obviously working for you at least for the time being.  Sarah and I believe strongly that having a budget is the best way to go, which is why we offer the Free Budget Template for anyone to give a try.  This is a basic, but helpful tool to try at no cost if you don’t see the benefit of having a budget.  Of course if you try it, love it and want more – you can always purchase the Enhanced Budget Template and truly rock out with your budget out!

“Everything will be okay in the end.  If it’s not okay, it’s not the end” – John Lennon

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4 comments

  1. Apathy Ends says:

    I don’t use a traditional budget, mostly because I am not disciplined enough to actually follow it, but these types of expenses still trip me up. I keep a small amount of money in a crappy savings account tied to my checking account in case one of these expenses comes up (I say crappy because the interest rate is .05%)

    I don’t have a plan to replenish it if we need it two months in a row however, so right now its a single barrel solution

    • Couple of Sense says:

      That is definately on the low end of interest rates, however it is almost not worth the effort to move it if you only keep a small amount in there any way. The single barrel solution is really all you can aim for, just need to cover 1 pitch not the entire inning. I wish I could say I was always perfectly disciplined with following our budget, still have slip ups now and then but making progress.

  2. lynn ling says:

    35 categories! That’s a lot to me. How did you manage to keep up with the list? I don’t really have a budget because 1. Am a mood spender. 2. My life is simple and budgets are too complicated for me right now.

    • Couple of Sense says:

      Hi Lynn – it seems like a lot but is remarkably easy to manage. In all honesty it was difficult to set up, but easy to keep up with. It also allows us to only have 2 bank accounts since we do all the separation ourselves. We break up our expenses into weekly contributions and monthly contributions (I get paid weekly, Sarah gets paid monthly). The amount we put in each week/month depends on what the expense is, if it is a monthly amount we’d put in the entire amount every month; if it is annual we put in a percentage of the total for the year. Every week when I get paid, all I have to do is enter my pay and it automatically splits the money across the categories we have decided on. The same goes for Sarah. For expenses, we enter our receipts and bills and it updates our available balance for each category.

      I know plenty of people who have decided not to live life on a budget because they see budgets as either too complicated or too restrictive. The great thing about having a budget is that it is YOUR budget – you can make it as simple as you want. Sarah and I find that the more focused the budget is, the simpler life becomes – we never need to worry about where we are going to get money for anything we need or want because we already have it mapped out. While we believe having a budget is for everyone, it is a personal choice.

      I get being a mood/emotional spender – just be careful that spending doesn’t cause a shift in your mood. Spending beyond your means leads to stress, stress might lead to overspending even more because there is a comfort in shopping. It can be a dangerous chain to start.

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