Last post, I talked about budgeting for taking a period of time away from work in order to write. I said that you should save for at least six months' worth of bills, plus two months' worth for extraneous expenses. But how much do you spend in a month?
First, your basic bills:
Any other monthly bill
Take a subtotal here. This is the money you know you pay.
Now, a few weekly bills. There are about 4.5 weeks in each month.
Groceries - how much do you spend each trip on groceries?
How many times a week do you shop?
How much do you buy in food?
How much do you buy in pet food?
How much do you buy in nonfood (toothpaste, aluminum foil, Lysol, kitty litter, trash bags, etc)
Eating out - do you eat out? Do you buy fast food? Do you buy a morning coffee? How often? How much do you spend?
Gas - how often do you fill up? Assume gas will increase $.50 by the end of 6 months. Add $.25 to the current price of gas and then figure out how much it costs to fill your tank. This will be your 'average' from which to calculate.
Add in expenses:
Do you have to pay parking fees?
Do you have regular medications?
Oil changes for your car
How often do you buy.... (for both work and home)
Toss in entertainment:
How often do you go to the movies?
Do you buy things with a monthly fee, like Netflix or WoW?
How often do you host friends? How much do you pay in 'guest food'?
What are your impulse purchase habits?
Do you take small vacations to the beach? the mountains? your grandmother's?
What other small entertainment items do you purchase on a semi-regular basis?
Do you need to purchase school supplies, or other child-related items?
Are your kids in any sports/activities which require fees and/or supplies?
Subtotal again. This will be your average "monthly" expense, before the "plus two." Multiply by six to get a general idea of what you'll spend in the next sixth months.
Finally, big-ticket expenses to consider:
Assume $800 for car repairs (more for older cars)
How much do writer conferences for your genre cost? Include hotel, gas, and food. How many do you plan to attend?
Are there any birthdays or holidays coming up, for which you need to purchase presents?
Is there any furniture you'll be planning to replace?
Do you like techno-toys? If so, is your technology due for an upgrade?
What are the chances that you'll need to replace your computer in the next six months?
Do you plan on any other big-ticket purchases?
Now throw in an extra $800 for other emergencies and unexpected expenses.
Total. You've now got a budget for approximately six months without employment! But remember - money goes out the door more quickly than you expect. Try picking up a part-time job to stretch things out. And never, ever round down when calculating - it's better to have extra money at the end of six months than to be wiped out financially! Also, remember that this is your budget. That means, whatever you said about the above, you'll have to stick to. So don't cut corners just because you think you don't really need to watch a movie in the theatres once a month. You'll probably still do it, and it's better to make allowances now than later.
What sort of unexpected expenses have come knocking on your door, things you didn't even think you'd ever need to plan for?