One of the most devastating things that happen to most budgeters is unexpected expenses.

This could mean anything from a larger-than-expected tax bill to a broken car, or just some subscription you forgot to budget for. Whatever it is, it comes along, unexpected and all, and as one does when one doesn't expect expenses - you don't have the money.

Unfortunately, if you don't have systems in place, these type of unknown unknowns can set you back an force you to take on debt.

With the right plan in place you can cover anything arises

Here's how, step by step:

Create budgets for all the major areas of your life.

Rather than anticipate the specific event, you can identify the areas you most likely have things pop up.

If you own a car, this will inevitably be a concern. The same goes for things like home repairs. These also include long-term expenses that happen once a year like taxes, insurance, etc. YNAB calls this "embracing your true expenses".

When a truly unexpected expense does arise, roll with the punches.

When you don't have the money to cover something, you need to cover it with funds from another budget. Jesse Mecham of YNAB calls this "rolling with the punches".

This means pulling money from various nice-to-haves to cover your funds. If you still don't have enough, then pull from more important, but less urgent funds.

When a truly unexpected expense does arise, create a budget for it!

While your face still stings a little from that bill slapped across your face, take a moment to plan ahead.

Create a category in your budget and set a recurring goal of saving some small amount like $20 a month. I have a general budget for bike, since I experienced my bike being stolen and two flat tires in the same year. As soon as you have a budget and a goal set, you'll never forget this expense again.

Create a budget for truly unexpected expenses & true emergencies.

In the event that you forget to budget or something disastrous happens, you want to have some fallback.

First, you can create a "forgot to budget 😅" category and add $20 a month.

Second, follow Dave Ramsey's Baby Steps rule number 1 to save a true emergency fund of $1000, and then 3-6 months expenses once you've paid off debt.

Budget ahead for future months, so you always have extra.

One of the easiest ways to have money to re-allocate is to not lock up all your extra funds!

Instead of going overboard with debt or investing, budget ahead for the next months in YNAB when you have extra funds. Do this until you have a healthy buffer of cash on-hand before you start funnelling all your money into debt and investments. YNAB calls this “aging your money”.

You will experience unexpected setbacks, but if you have systems in place, you'll always be able to adjust.

Happy budgeting, y'all.