How I Learned to Stop Worrying and Love My Unexpected Expenses

At YNAB, we give every dollar a job. We save money (more than you ever have before), both for fun stuff—dining out, cool vacations, concert tickets—and for the not-so-fun stuff—the unexpected expenses that seem to sneak up and derail your financial progress. Everyone experiences them, but YNABers are prepared. Why? Because YNABers plan for every possible expense, both big and small. 

But even if you are prepared for those irregular or unexpected expenses, no one likes paying for them, right? Have you ever had to call in a repairman for an urgent fix because your heater decided to fail at 3:00 am on a Saturday morning in early January and you have a newborn baby in the house? Well, I have… and I hated making that call, because I knew it would be expensive. But in the end, I was grateful to have a working furnace that morning and the money to cover it—and I think that’s the key. 

What if I told you that a simple mindset shift could help you not only be financially prepared for emergencies, but also actually help you feel grateful and satisfied when you do write that check? 

What Are True Expenses?

For the uninitiated, let’s talk about what True Expenses are and how you can always be financially prepared to tackle them head-on.

If you grabbed a random person off the street and asked them to list their expenses, they’d probably only think of their monthly bills—mortgage, electric bill, phone bill, you know the drill. While those expenses are real, they only account for a small portion of your overall financial picture. Many of our largest transactions are non-monthly expenses. Some that we can predict—Amazon Prime subscription, yearly property taxes, kids’ summer camp—and some that are unpredictable—car repairs, broken heaters, medical bills. These, along with our monthly bills, make up our True Expenses.

And we call them True Expenses, because non-monthly bills and expenses are real. They are going to happen! But they are easy to forget or even ignore because they don’t happen every month. So they’re not as urgent. 

Well, they’re not as urgent on a day-to-day basis.

Non-monthly expenses don’t feel as important until you’re on the side of the interstate with a flat tire. Then, it’s very urgent! And because these expenses don’t feel critical until they all of a sudden do, we don’t plan for them. Inevitably, we turn to debt or eat into our savings to cover these things, resulting in a never-ending debt cycle, a whole lot of stress, and a feeling that we can never get ahead.

How Do I Embrace My True Expenses?

So how do we get off this financial rollercoaster of emergency expenses? It’s very simple. Embrace them. Give them a little hug. Acknowledge that non-monthly expenses are never going to stop, and recognize that you’ll be so much better off if you expect them and plan accordingly.

This is the core of YNAB's Rule Two: Embrace Your True Expenses. Here’s how to do it:

1. Make a list of non-monthly bills and expenses, as many as you can think of. Look at your spending history for any big-ticket items. Walk around your house looking for things that may break or wear out some day. Talk to your friends about financial emergencies they’ve experienced in the past. 
2. Once you have your list, determine how much money you need to set aside every month to be prepared for each one. This can be tricky, and it’s absolutely okay to give it your best guess at first. Over time, you’ll get better and better at this. And as you track your expenses, you’ll have better and better data to guide you. 
3. Use a money and life-planning tool like YNAB to keep track of how much you have saved for all your non-monthly bills and expenses.
4. Use your savings to pay for True Expenses without debt or stress when these former emergencies come up. Emergency vet visit? No problem, Fido. Proceed to feel amazing every time you’re prepared ahead of time.
5. Iterate! Change your plan as your life changes, as your list shrinks or grows, or as you get more information. Then, because change is inevitable, repeat for *checks watch* the rest of your life!

Do this consistently, and you’ll find that financial emergencies start to disappear—and so will the stress that comes along with them. It’s not that your car stopped breaking down or your dog stopped needing to visit the emergency vet. Those things will still happen. But because you expect them and plan for them, they won’t feel like emergencies anymore. 

Okay, But How Do I Really Embrace My True Expenses?

Now, at YNAB, that’s usually where we stop: Follow Rule Two, and live happily ever after! But I think we can take this concept a little bit further. Is there a way we can not only pay for True Expenses, but actually love spending money on them too? After all, Rule Two says to embrace your True Expenses. Somehow embracing something feels like more than just planning for it. 

No one likes having to fork up the cash for something unexpected. It’s okay to feel sad when you have to pay a mechanic $1,000 to keep your car running, even if you have the money waiting for the bill! But it will hurt a little less if we reframe our thinking.

First, it helps to acknowledge that you will have to spend money to maintain things like your car, your house, your pets, your health, and any number of other possessions. This acknowledgement is at the heart of Rule Two. It’s what motivates us to allocate some of our precious income to jobs that haven’t even happened yet!

Second, it helps to acknowledge that all of these things are valuable to you. Most of the things we have to unexpectedly spend money on bring good things to our lives. My roof repair provides shelter for my family. My new tires give me reliable and safe transportation. A last-minute flight to visit a sick relative allowed me to support my family and create precious memories. All of these things are blessings. We should value them! And the fact that you set money aside for these things instead of allocating that money somewhere else proves that you value them!

So even if you have to divert more money to take care of an emergency, take comfort in the truth that your spending still aligns with your priorities. Often, the very expenses we grumble about actually enrich our lives the most! Taking the time to feel grateful for them and acknowledge their cost will help us feel better about our spending—even when it’s unexpected.

Take Care of the Things That Take Care of You

Following the YNAB Method is all about loving the way you spend your money more and more every day. To do that, we intentionally direct our dollars toward the things we love, so less of it flows toward things we don’t care about.

It never feels good when you have to spend money on things we don’t often think of as fun. But if we both accept that these expenses will happen and encourage gratitude for the blessings they bring into our life, we’ll start to feel better about spending money on them. When you set money aside in one of your Rule Two categories, you’re lovingly maintaining the things that make life good. 

Ready to build better money habits and get ahead of expenses that historically wrecked your money zen? Try YNAB free for 34 days.

YNAB IRL: When Emergency Expenses Pop Up, Julie Doesn’t Bat an Eye

This YNABer went from self-proclaimed-stress-shopper to master of Rule Two. ”I feel better prepared every day knowing how much I have to spend as things come up in life.”

Before YNAB, I was finding my way as a young 20-something. This was in August 2017. I quit my higher-paying job to pursue freelancing. Within 3 months, my savings had been depleted, I picked up a waitressing job and even my BF (now husband) washed dishes at the restaurant to help pay our monthly expenses. On top of this, my anxiety manifested into a shopping problem. Nothing big, but $20-30 purchases here and there. By June of 2018, my credit card debt amounted to over $10k. 

On our 2 year anniversary, my BF and I had a make-it-or-break-it conversation about life, money, motivation, etc and I knew something needed to change. A friend at the restaurant had mentioned YNAB. I signed up and had a free month to experience it, so I said why not? From there, I laid everything out. I became much more aware of what I had (or didn't have) to spend. I learned how to not spend my next paycheck before it hit the bank. I saw I wasn't making enough money and found a more stable job. By December 2018, I quit my waitressing job. Summer of 2020, I was debt free! 

Since then, we bought a house, had our wedding & honeymoon and our first child. All while managing to stay out of debt, save for things like vacations and expensive purchases. I even created emergency funds so when I had to get 4 new tires and new brakes, I didn't bat an eye. YNAB literally changed the course of my life.