The One Thing Missing From Your Budget That's a Life Changer

The One Thing Missing from Your Budget That’s a Life Changer


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You try to make a reasonable budget and sooner or later it falls apart or find you just can’t stick to it.

It feels like a diet. As soon as you commit to it, all you see chocolate cake and french fries.

If you’re on a “money diet” (aka “budget”) you might feel like you’re no longer allowed to spend money on that thing you really want.

Worse yet, you’ve tried your darnedest to remember everything, then something unexpected (like a flat tire, an annual membership or a pair of broken glasses) pops its ugly face into your budget and breaks it.

The good news is, a budget is not a diet and doesn’t have to be restrictive. With a little forethought you can have guilt-free spending and be prepared for the budget busters that want to sneak up on you.

The one thing that’s missing from your budget that changes everything is alligator expenses.


Alligator Expenses

Alligator huh what?

I’ve coined the phrase “alligator expense” to describe what happens to our best laid budgeting plans. Let me explain …

Do you know how alligators hunt?

They are ambush hunters. They lay in wait partially submerged in water. When their unsuspecting prey comes for a drink, they leap out and attack. The poor thirsty animal never saw it coming.

Alligator expenses are irregular expenses that lay dormant for months, maybe even a year. Long enough for you to forget about or not know the next time the expense will come up.

... They are expenses that ambush you.

How to Be Prepared

There’s an easy way to be prepared for these extra expenses, and it’s not a miscellaneous column in your budget.

It’s a little thing called sinking funds.

A sinking fund is when you take a small amount of money from each paycheck to save up to pay for a bigger expense.  

I use sinking funds for every irregular expense I can think of. Even if it’s only $100.


Sometimes multiple $100 expenses show up at the same time and put a strain on the budget. Because I’ve saved up little by little, over the course of several months or a year, I have the money available.

The sneaky alligator expense doesn’t affect anything else in my budget.

How to Set Up Sinking Funds

First, let’s rename sinking funds. We use the term “buckets” in our household.

We use the name buckets because sinking funds work like a bucket brigade.

Save a small amount of money from each paycheck to build a nice savings that will help you pay for less frequent expenses.

3 Steps to Start Your Sinking Funds

First, you’ll need to know what alligator expenses you have. Here are some ideas to get you started:

  • Use this list as a memory jogger for alligator expenses you might expect to pay
  • Brainstorm anything else that is specific to your family
  • Review bank statements and/or credit card statements for things you pay for irregularly

Next, create a budget for each item on your list.

  • Refer back to bank statements for amounts you’ve previously paid
  • Call around to local professionals to find out how much you should expect to pay (this works for things like a new set of tires for your car.)

Lastly, do a simple calculation to decide how much you need to save each paycheck.

  • Divide each expense by the number of paychecks remaining until the expense is due
  • Add all the per paycheck savings together
  • Save this amount from each paycheck in a savings account where it will not get spent.
Here's a Simple Example (more categories may be necessary for your family)


You now have money saved for those pesky alligator expenses whenever you need it.

Why an Other or Miscellaneous Column is Not Good Enough

You can't possibly know every little thing that's going to sneak up on you, so go ahead and put a miscellaneous column in your budget.

However, you shouldn't solely rely on your miscellaneous money to cover these expenses that you can otherwise prepare for. 

You know your car will eventually need new brakes and tires and you know Christmas is the same day every year. A little advance planning will save you from having to go into debt for something you know is upcoming.

a budget is telling your money where to go instead of wondering where it went

Cameron is a Financial Coach who works with couples and individuals to achieve financial freedom and peace of mind. She believes being in control of money = less stress + more fun! Join her on the journey to think about money less and enjoy life more.