If you stick to your budget every month but still find yourself spending all your money before the month ends, irregular expenses may be the reason. Irregular expenses are those bills that you pay once every quarter, once a year, or as needed. Since you rarely think about them, it’s easy to forget them until they’re due – and you have to scramble for cash to pay them.
Fortunately, surprises related to irregular expenses can be avoided with relative ease. You just need to identify your irregular expenses, calculate their total cost, and divide that amount by 12 to convert it into a single monthly bill you can include in your budget.
Identify Your Irregular Expenses
Irregular expenses include any bill that is infrequent but predictable, such as insurance bills that you pay once or twice a year. They may also include veterinary bills, some types of subscriptions, and more.
Think about all your expenses over the year and make a list of all the irregular expenses that come to mind.
Examples of Irregular Expenses
When sitting down to work on identifying those irregular expenses, some may come to mind more easily than others. Consider these examples of irregular expenses that are often forgotten:
- Charitable contributions
- Childcare or babysitters
- Car insurance
- Haircuts
- Health expenses
- Home repairs
- Gifts for family and friends
- Tuition fees
- Vehicle registration
Irregular expenses are more common than you might think. Learn more about irregular expenses you should be cautious of.
Determine Their Total Cost
Now that you have a list of your irregular expenses, determine the cost for each item. In some cases, like insurance, this task will be as simple as checking the premium. In other cases, like home maintenance and gifts, you will need to estimate the cost or set a budget for yourself.
Not sure what the appropriate cost for something is? Look at your bank statements or records from last year to determine how much you spent.
Now, grab a calculator. Add up the cost of all your irregular expenses, and make sure to double-check your calculations. Then, divide that number by 12. The resulting number is the amount you will need to allocate each month to cover all your irregular bills for the year.
Include this expense as an item in your monthly budget, and treat it just like any other bill you have to pay. You may set a due date as a reminder to pay it.
Tip: There is a chance that you may underestimate the costs, or you may forget an expense or two. Add 10% to the total amount as a cushion.
Where to Put the Money
To ensure you have money available when you need it, it may be a good idea to set up a separate savings account for your irregular expenses. Then, you can transfer money into this account each month.
If you think you might dip into the account for other purposes, consider opening an account at another bank so that it’s not easily accessible on a regular basis. Online banks work well for this purpose, as do local banks that have limited hours and fewer branches.
When the due dates for your irregular bills arrive, simply pay them from your new account, and enjoy not having an additional source of stress in your life.
Tip: If you still feel tight when it comes to paying irregular expenses, consider setting up an automatic savings plan. Once a month, or with each paycheck, automatically transfer a small amount of money into your savings account. If you never see the money, you’re less likely to miss it.
Considerations
Final
It will take a few months to build up the balance in your irregular expenses account, so if you have any large bills coming up soon, make sure to set aside some extra funds to cover them.
Bills change over time, so review your irregular expenses once a year, and make any necessary adjustments to your totals.
Was this page helpful? Thank you for your feedback! Let us know why! Last
Source: https://www.thebalancemoney.com/how-to-budget-for-irregular-expenses-1387863
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
}@media screen and (max-width: 480px) {
.lwrp.link-whisper-related-posts{
}
.lwrp .lwrp-title{
}.lwrp .lwrp-description{
}
.lwrp .lwrp-list-multi-container{
flex-direction: column;
}
.lwrp .lwrp-list-multi-container ul.lwrp-list{
margin-top: 0px;
margin-bottom: 0px;
padding-top: 0px;
padding-bottom: 0px;
}
.lwrp .lwrp-list-double,
.lwrp .lwrp-list-triple{
width: 100%;
}
.lwrp .lwrp-list-row-container{
justify-content: initial;
flex-direction: column;
}
.lwrp .lwrp-list-row-container .lwrp-list-item{
width: 100%;
}
.lwrp .lwrp-list-item:not(.lwrp-no-posts-message-item){
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
};
}
Leave a Reply