As I’m writing this I’m really in excruciating pain due to a pinched nerve in my neck and shoulder. It’s actually impossible to explain the pain sensation but I’d rather you just try to imagine and not have to experience it yourself! I have a dull never-ending pain all the way down my arm along with a numb finger tip.
So what does this have to do with my budget? Well, at the start of the month I had R460 in my budget for medical expenses and only R500 in my emergency fund. So with R960 available and R1800 worth of physio expenses and almost R300 for medication you can clearly see that my planned budget just won’t work!
Let’s delve deeper into the situation…
Why is my Emergency Fund so low?
I recently wrote about how when it rains, it pours. I had several unexpected things happen last year which were covered by my emergency fund and I’ve been topping up the fund with a few hundred rand each month. Last month however I had two more big expenses that required my emergency fund money. Firstly my car was broken into and the insurance excess (co-payment) was R2,500 and then I had to buy rain-water collection tanks at R4,500. The water tanks may not seem like an emergency expense but with severe drought in Cape Town we’ve been warned about “Day Zero” when the city will potentially run out of water. So besides insane water saving measures, we need to harvest rain water and do all we can to ensure that we have enough water as every drop literally counts! So after all these unplanned expenses by emergency fund has practically dried up.
Why so little in my Medical budget?
I usually allocate R200 per month just for day-to-day health-related things that may happen. An annual check-up and some over the counter medication. Generally speaking I’m really healthy and up to now the budgeted amount has always been sufficient. In case you’re wondering, I do have hospital insurance plan which will cover any major events resulting in me being hospitalised, so this budget category is just for minor events.
So how do I fix things now?
Budgeting is a constant process of learning and adapting. Unexpected things happen and life circumstances change. It’s quite easy to solve my current situation; I just need to take some money out of my general savings and cut back a little on other things. It’s not something I like to do, but medical expenses are definitely a higher priority for me.
My emergency fund has really saved me over the past few months and I’m pleased I have one. I do however now need to focus on building it up to my ideal amount of R15,000. This value is what suites my circumstances best but read my post on why you need an emergency fund to see what you need to consider when starting yours.
It’s also obvious that my budget for medical expenses needs to be increased as I’ve never really thought about multiple successive visits to medical practitioners. This means a little less savings and probably a little cut back on other items.
Budgeting really helps you to see your money holistically and to set your priorities straight. If you don’t have a budget yet then have a look at this post for 5 simple steps to create a budget.
You need to learn to be adaptable with your finances and as life happens, monitor and adjust your budget accordingly. You don’t need to beat yourself up when you get it wrong but you do need sufficient money in your emergency fund and savings for when life throws crazy curve-balls.
And as for the pinched nerve, I really hope it gets sorted out this week. If not then my expenses will increase as I’ll need to find a specialist of sorts. Eek, that sounds scary!