Friday, September 27, 2013

Planning for Irregular Expenses

Monthly Expenses are easy to budget for because they are routine and predictable.

Non-monthly Expenses can lull you into a false sense of security and then blindside you.

Oil Change Expenses are Typically Quarterly

Certain expenses are not monthly but hit at irregular times, for example, annually or quarterly. The catch with these expenses is that you forget about them and they pop up when you are unprepared.  For example, annual membership dues, bi-annual property tax bills, quarterly oil changes, tire rotations, annual back-to-school expenses, children's field trips, Christmas gifts, etc.

How to Prepare for Expenses which Hit at Irregular Times:
1. Start a Budgeting Calendar.  You may choose to do this on a regular calendar or by using Personal Finance Software such as Quicken or youneedabudget. But seeing it visually on a calendar as opposed to just a list or spreadsheet helps you remember the timing of when these things hit.  You get the big picture of where your money is going in different months and prepare for the upcoming expenses each month.  I use Google Calendar to add dates for the items below.  We use this in addition to budgeting tools such as Mint and Quicken. Here's a sample list of irregular expenses:
  • Dry Cleaning
    Holidays: Gifts, hosting parties, family gatherings, etc.: graduation, wedding, baby, birthday, Christmas, anniversary, baptism, Mother's day, Father's Day, Valentine's Day, Bosses' day, or other special occasion.
  • Haircuts (every other month or every 6 weeks)
  • Dry Cleaning
  • Oil Changes for automobiles
  • Car Wash
  • Tire Rotations for automobiles
  • Annual medical checkups
  • Flu Shot or other vaccinations
  • Annual Eyedoctor Checkkup
  • Bi-annual Dental Cleanings
  • Back-to-School Registration, Clothes, Supplies, Activities, & other Expenses
  • Vacations
  • Medication refills
  • Landscaping Services
  • Carpet Cleaning Services
  • Furnace Cleaning
  • Accountant's fees/tax filings
  • Pet care - vet visits, shots, medication, grooming services 
  • Other household maintenance/repairs
  • Fundraisers
  • Continuing Education Classes or Credits
  • Etc.
2. Turn an Annual Bill into Monthly Payments
See if you can change your insurance payments (at no additional charge) into monthly installments or start your own "fund" at home by setting aside 1/12th of the money each month for 12 months until the bill comes due.

For example:
  • Homeowner's Insurance
  • Property Tax Bills
  • Annual Memberships
  • Vehicle City Stickers
  • License Plate renewal fees
  • Christmas gifts

3. Keep a vehicle maintenance schedule for all your vehicles and mark your calendar.  If you lost your schedule, you can click here and fill in your car's make, model, and year and find it.

4. Keep a Home Maintenance/Repair Schedule
For example, furnace cleanings, air conditioning maintenance, gutter cleaning, etc. Here's a home maintenance schedule from Lowe's.

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