Emergency funds are an important part of your financial plan, covering an unexpected expense or normal expenses during a period of reduced income. But many of the situations traditionally associated with emergency funds aren’t really unexpected expenses and can thus be handled in a different way.

Many people confuse irregular expenses with unexpected expenses. An irregular expense is typically known, or can be estimated beforehand, but occurs on an irregular schedule. Things like auto repairs, medical costs, household repairs, and even gifts fit this description. One of the nice features of tracking your expenses and using a budget is that you start to get a better understanding of such expenses.

Take gifts, for example. Obviously, birthdays and holidays are gift-giving occasions that are known ahead of time. By tracking your expenses, you’ll probably see other trends emerge as well. You may notice that you get invited to a few weddings each year, or that a handful of friends have babies, etc. Once you get a sense of the total amount required in a typical year, you’ll be able to add that amount to your budget.

If you have an expense item in your budget for each irregular expense category, then savings will happen automatically. If you budget $1,200 a year for auto repairs, you’ll save $100 each month that a repair isn’t needed, and that money will be available when the inevitable repair does come up. If the repair is needed early, before you have saved enough, then you can dip into your emergency fund, but then the money you allocated towards repairs in future months should be used to repay the amount you took from that fund.

I have many expense categories in my budget that I rarely use. Most months I spend nothing and the budget surplus accumulates in savings. Then, when an expense is necessary in that category, the money is already in place. You shouldn’t have to rely on an emergency fund to cover irregular expenses, since they can be planned for in a budget. That will allow you to save your emergency fund for true emergencies, such as the loss of your job.

Do you budget for irregular expenses that others define as “emergencies”?

Increasing your productivity is one of the best ways to increase your income. When you increase your productivity, you are able to do your work in a shorter amount of time and with a higher quality output. Here are some tips to help to help you increase your productivity, no matter what your job is.

1. Learn as much as you can. It is surprising how many people do not take advantage of every opportunity to learn more and increase their knowledge and expertise in their fields. Many employers have courses and other training available to anybody that asks. All you have to do is ask your boss or call the HR department and inquire. Many times you will be given time off to take classes that are paid for fully by your employer, which will allow you to be more productive at your job and eventually lead to higher compensation and personal income.
2. Cut off the distractions. One of the best pieces of advice that I ever got was “work when you work,” don’t socialize, and don’t catch up on the news or other information sources. Put your head down, put on the headphones, put up the “do not disturb” sign and work. Make a list of a few tasks that you want to accomplish that day, and don’t do anything else until you accomplish those tasks. Turn off the cell phones, BlackBerry, instant messaging, Facebook and Twitter, and focus on getting those tasks done. Afterwards, you will feel like you have accomplished a lot and you will not have any guilt about playing or doing whatever else you want.
3. Time block. Whenever I sit down to write a blog post, I know that I need about two hours from start to finish. Starting with an initial idea, doing research, drafting and editing takes about two hours. In my schedule, I have to block out two full hours where I know I will not be distracted and then I can fully focus without worrying about being interrupted and having to start again. There are emergencies that can’t wait two hours. You should do the same: block off several hours at a time to focus on one task. Cut off all distractions, let people know you will be available after that time, and then let your mind run with the opportunity to stop thinking about anything but the task at hand.

Finding ways where you can do things faster, more efficiently and with less distractions will make you more productive at your job. This will lead to higher income either from your current job or from the marketplace in general. It will also allow you to enjoy your free time without any guilt, because you will have already accomplished your tasks for the day.

We all know that perception and reality are often disconnected. For retailers, the former stands to bring customers in, or drive them away, much more so than the latter. With so many retailers going under, speculation about who will be next has added to the downward spiral. Perceptions affect more than just the consumers on which retailers rely. Their lines of credit, supply chains, and investor contributions all stand to suffer from negative press as well.

According to a USA Today report, Rumors about retailers can be very bad news for their health, gift card sales are one area where significant declines can occur amid rumors of a store’s bankruptcy. As I mentioned previously, in Another Downside of Gift Cards, gift cards may become worthless once a company goes bankrupt. The reason is that companies aren’t required to keep gift card proceeds separate until the cards are redeemed. So it’s not surprising that people wouldn’t want to purchase gift cards at stores that are seen as a bankruptcy threat.

The USA Today article mentioned quite a few retailers which often end up on published lists of companies likely to go bankrupt, even though their financials appear strong.

The takeaway seems to be that retailers would prefer that you don’t avoid buying gift cards simply because of speculation about a potential bankruptcy. Unfortunately for retailers, there are many other reasons to avoid gift cards, such as those I covered in The Gift That Keeps on Taking.

Do you have any gift cards that have become worthless either through bankruptcy of the issuing company or due to excessive fees, inactivity or otherwise?