Beware of the “Miscellaneous” Envelope

misc-file-cabinetDoes your spending plan have a Miscellaneous envelope?  If so, you may be missing out on valuable data about where your money is really going.  Very few expenses that we have over the course of the year are truly “one-time expenses” that really should be considered miscellaneous.

I had one client a while back that put a few overdue library book fees into the miscellaneous envelope. When we started talking about the expense she realized that throughout the year she often had overdue library fees because her kids sometimes misplaced the books.   Library fees are not usually a large expense thankfully, but why not build a Library Fees envelope into your spending plan and track those expenses?   This also created a teaching opportunity for her with her children to teach them about the costs of not returning the books on time.

A Cash envelope can also be another way of avoiding tracking all your expenses.  Don’t fall into the trap of categorizing all cash withdrawals into one envelope.  Instead create an offline cash account and track all the purchases you make with cash.  This way you have a better idea of where your cash is going and a better chance of staying on track with your Spending Plan.

Having a “catch-all” envelope can keep you from really understanding where your money is going and potentially from reducing unnecessary spending.  Don’t let your Miscellaneous envelope keep you from finding your areas of hidden spending or from making progress towards your financial goals.

Jennifer Streiff, Money for Life Coach

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