The little expenses that catch you short

I have a fairly detailed personal budget spreadsheet which shows expected expenses and income on a daily basis for the next three months and I have done a great job of tracking anticipated expenses that don't occur on a daily weekly or monthly basis, but every once and a while something slips through. For this reason, amongst others, I track and update my spreadsheets at least weekly and sometimes even daily. Just this morning I checked my Fidelity brokerage account, which I now use as my primary checking account, and it was short by $67 and close to zero to boot. Hmmm. Oops!

A little investigation, not a lot of time, but nonetheless a waste of my time, showed that the $67 was the fee for my passport renewal.

My passport expired back in 2003 and since I was having financial difficulties (big time) and not anticipating even being able to afford international travel any time in the foreseeable future, I let it slide. Then, last spring, when I got a full-time job offer (from The Evil Empire) and would be moving in the Seattle area and might want to hop up to Canada for a weekend or whatever, I decided to renew my expired passport. I actually got the pictures at the post office in Boulder, CO, but since I was going to be moving fairly soon and was in a short-term cash crunch (waiting for that first pay check), I let it slide again.

Just a few weeks ago I finally had worked through enough of my higher priority tasks and decided to finally get the passport renewal out of the way. So, I filled out the application online, printed it and signed it, and mailed it (and the photos) with a $67 check to the U.S. Department of State. I even wrote the details in the check register for my Fidelity account. I'm so diligent. But, because I did this at work (shame on me), I didn't have immediate access to my home PC and neglected to enter the check and expense in my spreadsheets when I got home that night.

On top of that, I made an extra payment to the IRS for my back taxes installment plan since I thought I had a little extra cash in my Fidelity account.

I get paid twice a month and my expenses are not evenly balanced through the month, so there are times when I have lots of cash sitting idle and other times when I have next to nothing in the account. I'm always trying to save a little more, so any "extra" cash gets quickly shuffled to somewhere where it earns more interest or cuts my back taxes.

Actually, this is the habit I developed when I was primarily using my Wells Fargo checking account which pays next to nothing in interest. My theory had been that when I switched to using my Fidelity account I would keep some extra free cash in the account since it would be earning a reasonable level of interest, but somehow the implementation of that theory slipped through the cracks of my mind.

I really do need to keep an extra buffer in my main Fidelity account so that relatively small mistakes such as this passport renewal, not to mention truly unexpected expenses, don't cause me such grief. The Fidelity account does pay a semi-decent level of interest, so the dollar or two of higher interest I would lose each month by keeping an extra $1,000 in the Fidelity account really isn't a big deal financially, especially since it gains me significant peace of mind.

Now, I do actually have plenty of cash in a money market fund in that Fidelity account, and Fidelity will actually automatically "sell" from that fund to prevent a check from bouncing, but my intention is to keep that money intact as both a high-interest savings vehicle and for truly emergency rainy day uses.

The other minor difficulty I have right now is that I am spending a fair amount of money on my two-week trip to New York City at the end of the month, and that introduces a temporary spike in my expenses over the next couple of months. I have already identified the source of the funds to pay for those expenses, but it simply wreaks havoc with the normally "smooth" flow of cash through my account and budget spreadsheets.

-- Jack Krupansky