Tune in to Spending Triggers

Just when you think you have a handle on your spending, you can find yourself blindsided by a spending binge. And I’m not talking about the unexpected broken tooth or kaput water heater. Some situations trigger surprise spending. Once you think about these events in advance, you’re far less likely to be caught off guard. I got thinking about this recently when a friend retired. This was a long-anticipated happy occasion. Charlie had worked in a physically demanding job for 34 years and was more than ready to slow down and enjoy the fruits his labor.

Reward turns sour

Not unlike other new retirees, Charlie planned to buy a tangible reward that he now would have time to enjoy—for him it was a sauna. What a treat! He’d put it into a corner of his large garage. In his working years, he’d turned for electrical needs to a handy co-worker. The price was right, but for the sauna—his special indulgence—he wanted to make sure everything was done correctly. He called in a licensed electrician. Good call. But as it turns out, a costly one. The electrician discovered, first, that the electrical service needed an upgrade to handle the sauna. But he also found that years of previous amateur electrical work were not up to code, to the point of threatening safety. The solution? A complete overhaul of the electrical service.

Charlie was relieved to know that the work was done properly, but this became a significant surprise expense—triggered by one soberly planned and budgeted expense.

“Watch out” expenses

There are lots of planned expenses that trigger surprise, or at least unaccounted for, payouts. For example, say you decide to buy a tablet to read e-books or video game console to play games.

You may end up spending hundreds of dollars more as you feed the device with reading material, apps, and games. Those downloads add up. And that may be fine. The point is just to look a bit down the road and anticipate how one expense might trigger others.

Plan carefully for big ticket items, anticipating any possible additional or ongoing expenses for that purchase. If the item fits in your budget and doesn’t jeopardize other financial goals, you’re good to go. If it doesn’t, rethink about buying it until you are certain you can afford it. That foresight will help prevent serious financial worries in your future.