Murphy's law, no big deal

Two days ago my hot water heater would not start; and as I was sitting at my computer desk, the desk collapsed almost crushing my legs. Add that to rain water leaking into my living room and I was freakin out. Seems that Murphy's law for me is that bad things happen in threes.
But just two days later and I am much calmer. Scott, my stepfather did something to the hot water heater and it is working fine (I think he dusted it, why didn't I think of that?) Also my brother Kevin brought me another desk, so my computer is back up and running.

Other than the leaks which I am working on getting some estimates for, the other things are fine now.

This reminds me that "this too shall pass." When we are in a tough or stressful situation we tend to freak out (well I know I do.) But most things are not really that big of a deal.

My mom has always said, "What is the worst that can happen?" Most of the time the worst will never happen, but even the worst is usually less than we could imagine.

Now I am referring to things like flat tires, and leaky roofs, and no hot water. Because I learned a hard lesson this year that the worse can really happen, when we lost Eric, but this post is about not stressing over the little things.

Also this brings me to my second point (first was do not STRESS the SMALL stuff,) being prepared for the small and big stuff. Face it hot water heaters and furnaces, and cars do NOT last forever. We have to assume they will break and plan to fix and replace.

Not only do we have to create a normal monthly budget and start using it, we need to plan for life to happen. I have what is called a freedom account (term from Mary Hunt) that is basically budgeting the irregular monthly expenses. This is separate from my emergency fund. To me an emergency is something like a death in family, job loss, illness, fire, etc. Needing new brakes to me is not an emergency, but something I expect will happen sooner or later (sooner most likely.)

So each month I put $100 into my freedom account, plus I add $1,000 from my tax refund. This is what my freedom account covers over the year:
$400 new glasses or contacts (each year I buy one or the other-no vision insurance)
$100 Joshua's birthday party
$100 Jason's birthday party
$40 car registration
$160 for oil changes
$300 Christmas
$100 AAA membership
$1,000 car repairs / replacement

Your freedom account could also include:
gifts
vacations
etc. etc.

A good way to go about figuring your irregular monthly expenses is to go through 2009 spending (credit cards, checkbook stubs, etc.) Write down stuff you spent money on that was not included in regular monthly budget. Total entire amount, then divide by 12.

It is a good idea to keep track of what each subline (meaning vacation, gifts, etc.) has in it. I use a separate checking account for my freedom account. If I look and see the balance of $2,000, I can't spend $2,000 on gifts. I have to know how much is left in the gift line. Then I can only spend that money.

It may sound a bit confusing, but I assure you having this account has saved me. It is a sigh of relief knowing if my brakes or tires go I have x amount of dollars in my freedom account.

Now I need to add a home repair fund to my freedom account. Yikes.

Do you have a similar plan for irregular expenses?

-Becky