Author Topic: psychology of unexpected expenses?  (Read 1350 times)

johndoe

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psychology of unexpected expenses?
« on: December 10, 2016, 07:40:50 AM »
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I've just had one of those "rainy days " we all plan for.  When I look back on this expense in say, a year, I doubt it'll be more than a blip on my personal capital screen.  However, mentally I feel ...beat up.  I am not going to change my life one bit due to this expense, but it still makes me feel bad, or maybe that I'm falling "behind".  I feel the irony is that I put a lot of thought into (saving) money so that I don't need to put a lot of thought into (spending) money, but it hurts to spend it.

In my case, the expense was optional (car repair) , so perhaps I'm beating myself up over other possible outcomes? Also, this isn't the first time this feeling has happened for me.  Is this something you can relate to, and how did you get over it?

Guava

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Re: psychology of unexpected expenses?
« Reply #1 on: December 10, 2016, 08:19:24 AM »
I always try to remember how fortunate I am to have saved so much to have the option to pay a large unexpected expense without forgoing food or a mortgage payment or something else. You are right, in a year you won't even notice. You just have to remember that you save so you don't have to make hard decisions and you don't have to worry.

swick

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Re: psychology of unexpected expenses?
« Reply #2 on: December 10, 2016, 09:31:01 AM »
Happens to all of us, just depends on how you re-frame it. Instead of looking at it the way you are, you can be grateful that you had the reserves that it didn't cause you financial hardship. At the end of the day, you have a safer mode of transportation (unless your "repair" was an optional paint job) You have a car, most of the population in the world don't - and not by choice.

You didn't have to make the choice between the car fix and this months rent. You didn't have to get into payday loan cycle hell. You didn't have to make any of the hard calls that by choice or circumstances people have to make every day.

Part of it is also just acknowledging that shit happens and this lifestyle leaves you much better prepared for it. Natural disasters, accidents and health issues aside ( and even most of those can be somewhat expected) There really shouldn't be any "surprises" Spending money on maintenance and replacement and such is part of the cost of owning "stuff" no matter how practical the item is. You have to decide for yourself if it is worth the tradeoff.

But they key to quickly getting out of the mind-fuck is to be grateful for what you do have. Acknowledge it. Write it down. Being financially responsible has given you tons of opportunities, acknowledging them goes a long way.

maizeman

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Re: psychology of unexpected expenses?
« Reply #3 on: December 10, 2016, 10:52:44 AM »
Is this the first time you've had to shell out for a major car repair since jumping on the MMM bandwagon? I ask because I've noticed a pattern in my own emotional reactions to these sorts of "known unknown" expenses popping up where, for each major type of expense (car repair, roof replacement, miscalculated quarterly tax bill) the first time it happens I feel really down, and like all of my projections were too optimistic and I'm not actually making progress, and subsequent recurrences of the same type of known unexpected expenses don't bother me nearly as much.
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BlueHouse

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Re: psychology of unexpected expenses?
« Reply #4 on: December 10, 2016, 11:56:59 AM »
I completely understand and feel this way any time I have to cut into my savings plan.  My savings right now are high enough that I can cash-flow most unexpected expenses.  But then I can't save what I want to that month.  Any way you look at it, it sets you back from your most optimistic plan. 

I guess for me, I'll have to accept a less extreme outcome. 
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Spork

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Re: psychology of unexpected expenses?
« Reply #5 on: December 10, 2016, 12:47:04 PM »
I think you'll find the unexpected expense is actually quite expected.  We've all been there.  We'll all be there again.

You had the cash.  It didn't knock you on your ass.  There is just not a reason in the world to feel beat up.  Had you not been prepared, you'd be paying it out monthly on your Mastercard bill for the next 8 months.  As is, life really didn't change.  It's cool.  Have a glass of wine and keep your stick on the ice.
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Metric Mouse

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Re: psychology of unexpected expenses?
« Reply #6 on: December 12, 2016, 06:05:06 AM »
Psychologically, humans tend to feel loss as more impactful than gain. So now that you've re-framed the money as 'lost' from your savings, you've chosen to let it impact you more.
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Re: psychology of unexpected expenses?
« Reply #7 on: December 12, 2016, 06:41:26 AM »
I've just had one of those "rainy days " we all plan for. 
You could consider a "two tier" emergency fund.  One tier is for "living expenses if I lose my job" or similar catastrophe.  The other tier is for "unexpected expenses."

For example, you might have $40K/yr living expenses and decide to have a six month emergency fund, or $20K.  You could also have a $5K (or whatever you think reasonable) "unexpected expense" fund, for a total of $25K. 

You would probably keep the whole $25K in one account, but mentally separate the $20K and $5K amounts.  Then when car repairs, appliance replacements, etc., come along you just take the money out of your $5K "already planned for" amount, then gradually rebuild it.

Might not be mathematically pure but this is posed as a psychology question.

MrsPete

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Re: psychology of unexpected expenses?
« Reply #8 on: December 13, 2016, 12:44:19 PM »
I know how you feel.  I've been in "rainy day mode" for the last two months: 

- My car had some problems, and while it was in the shop I had a good bit of maintenance done -- brakes, struts, things that really did need doing.
- I needed new eye glasses, and I wear an expensive progressive lens.
- My teenager also got glasses, fortunately a simple, inexpensive lens.
- Car tags and taxes were just due. 
- College tuition is due soon. 
- My cell phone broke, and since we have no house phone, I had to replace it right away. 

I've definitely spent more than I've earned in the last two months, but I'm not losing sleep over it:

- I'm thankful that I've saved so that I can pay these things without difficulty, and as I look around my house, I see that (because I've squirreled things away) we can cut back our spending to replenish the emergency fund ... without sacrifice.  Looking in my freezer, I see several big pork loins that I purchased buy-one-get-one-free; I'll cook those for family get-togethers and pot lucks with friends.  I also have lots of homemade soups, spaghetti sauces, and casseroles that I've frozen -- those'll see us through everyday meals until our emergency fund is replenished.  I'm glad that I've done the bulk of my Christmas shopping and that I have an artificial tree in the attic. 
- I'm thankful that I've owned this car for 8 years and have really never done anything but oil and tires thusfar.  Now it should be set to serve me well for another 8 years, or even more.
- My old glasses lasted me a long time, and I'm amazed at what I'm seeing now. 
- My daughter's moving forward in college, and this payment is my halfway-to-her-graduation payment. 
- I can't find any silver lining about my phone; I'm kind of pissed that the old one only lasted two years.