Saving for the Expected: The Baby Fund

I often hear the old adage, “Save for a rainy day”, in reference to unexpected occurrences such as unemployment, health issues, and accidents. But I rarely hear people express the need to save for major expected expenses that can just as easily derail your budget and potentially lead to unwanted debt.

Last year we were fortunate enough to bring baby Sweet Pea into our home. Although we have great health insurance, we still knew that we had to make room in our budget for medical expenses  associated with her birth.

Shortly after we found out we were pregnant, I started doing my research on the estimated costs for a routine delivery in our area. I looked into various doctors, hospitals, etc. and after extensive online research and numerous phone calls I felt confident estimating the cost to deliver our baby.

We put our emergency fund savings on hold for a few months and funneled all of our savings into “The Baby Fund”. After this was fully funded we returned to building up our emergency fund.

My estimation for the cost of her birth, was roughly accurate. The only reason we had to dip a little into savings was an extra day in the NICU.

Knowing that our baby was paid for without going into debt, allowed us to fully enjoy her without worrying about finances.

Oops, What Happened to Our Cell Phone Bill

Tim and I each have a cell phone but not a land line. Tim’s is a prepaid phone that we put minutes on about every three months. Mine is a basic plan with 450 minutes and free nights/weekends and calls to members of the same provider. Whenever Tim needs to make some calls, we just switch phones. Since most of my family keeps in touch through the phone and has the same provider, and most of my calls are to family, we rarely go over our minutes. In fact, until this last month I don’t think we came close to within 100 minutes of our limit.

So imagine my  surprise when I found our bill this month to be almost double what it normally is. We had made a few longer phone calls and never checked our balance. I didn’t catch the error until it was too late for the phone company to change our plan for one month and change it back, which could have saved a few bucks.

We will pay the penalty this month for assuming that we could never go over our minutes. Because of this slight hiccup we are making some minor adjustments in our budget this month. I have decided to go on a cash only budget for the bills we don’t pay online or by check. In addition I am making a few more items from scratch like bread and refried beans.

In order to prevent this from happening in the future, I am making it a priority to check our balance halfway through our usage period and if we are close to our limit than checking it every few days. For others who have trouble going over their balance there are tools your cell phone company might offer for a small fee to prevent you from going over your minutes. You may also be able to change your plan for one month and then change back.

Although this bill is an inconvenience for the month, I would rather learn my lesson by going less than $50 over than going over by several hundred. We are also at a point where we don’t need to go into debt or dip into savings to deal with this small situation, we just need to use a little creativity.