This month I have to spend a huge amount of money for gifting purpose. There qas marriage, 2 birthdays, one anniversary and other things. Now we often ignore these small things but basically they eat up a lot of money. For example, this month around 3% of my monthly income went into gifting. It seems small but it actually effects your expense and savings.
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For example, you have thought about X expense and if it goes above the limit you have to rely on Credit Card and thus next month you have to pay that Credit Card bill and thus your next month either savings will be reduced or your expenses will be little different. But whatever is the case there will be some ups and downs.
And that's why we always have to keep the buffer when we plan our expenses. We call it as Gifting expenses. For example, every month you can keep 2% of your income as Gifting expense and if that money is not utilized you can keep it as buffer. So next month if you need extra for Gifting you can take out from this buffer. In this way you will be sure that you have the money for the gifting and thus your expenses for this or next month doesn't messes up.
And similarly we have to take care of this type of ad-hoc expenses like these. For example, sometimes you have kids expenses which doesn't happen all the months so you can keep the buffer money whenever you need you can use it. And when you are creating the budget, and savings before expenses then you can keep this in mind and save as per the budget itself.
