Create an action plan for yourself that includes regular and
irregular expenses as well as short, mid and longer - term financial goals.
Whether it's medical expenses, home repairs, or a friend's wedding,
irregular expenses tend to come up every month.
It's necessary to reserve income
for irregular expense, but it's not necessary to predict the actual amounts.
I also have a small savings account at the bank (just a few hundred dollars), to
cover irregular expenses like car repairs or license tags, vet bills and the like.
Despite not knowing exactly where you'll end up spending the money,
factoring irregular expenses into your budget from the start means they won't catch you off guard or drain your emergency fund.
Sit down with your credit card bills and bank statements and track how much you spend across each category annually, including rent, food, and all of those one -
time irregular expenses.
Budget to set aside money ahead of time to cover
irregular expenses such as vacations, pet care, and medical expenses.
The Budget Spreadsheet can help you determine
what irregular expenses exist and which regular ones must be paid pronto.
My saving to spend account is set up to deposit 1/26 of our total
expected irregular expenses (property taxes, car insurance, home insurance, etc) every paycheck and then we're looking to pay down our mortgage while also investing as much as possible in our pre and post taxable investment accounts.
We've also got a monthly
automatic irregular expenses transfer going (I called it «Occasionals») plus we've got... New Car, Other People's Weddings and Baby Showers, Travel, Car Maintenance, Gifts, New Computers / Cell Phones, Charity, and of course, the general Retirement / Financial Independence tax advantaged funds.
«When we budget monthly, we have a hard time forecasting that we're actually going to need extra money throughout the year to pay
for irregular expenses, even if it's things like your car insurance premiums,» she said.
It's best to have a separate fund for these large,
irregular expenses.
They have to bear their household expenses, rent and
some irregular expenses people barely make a budget for them.
For
any irregular expenses (e.g. insurance premiums, remodeling projects) I've setup separate online savings accounts with automatic transfers every pay period.
- Create a Yearly Budget to make future projections, handle variable income, plan for
irregular expenses (non-monthly), and budget variable expenses like seasonal electricity or water bills.
Most of us also have
irregular expenses — like insurance payments or property tax payments that only happen once or twice a year.
Envelope budgeting allows people with very irregular incomes or
irregular expenses to manage their cashflow.
Start by adding up all of
those irregular expenses from the previous year — your car maintenance, your home insurance and travel — and then divide that number by 12.
The third bucket is set aside for saving for the future, and the final bucket — the one that gets most people into trouble — is for
irregular expenses, those once - or twice - a-year bills that aren't predictable on a monthly basis.
To minimize the impact of these larger,
irregular expenses, consider setting up a separate savings account.
All irregular expenses (plane tickets, computer / laptop, car repairs, etc.) are also recorded in our budget spreadsheet, but do not have a specific line in the budget.
Use the fluctuating income to cover
the irregular expenses.
Icebergs can sink ships, and
irregular expenses can sink spending plans.
It's so huge for handling
those irregular expenses that you KNOW will come up.
However, for the short to medium - term goals like furniture replacement, vacation, and
irregular expenses, tracking multiple savings accounts can be annoying.
This might be necessary if you were using the savings tracker to save for a few different
irregular expenses (like a semi-annual insurance bill, quarterly estimated taxes, Christmas, etc.) and needed to make a single transfer into your spending account to make payments on more than one irregular expense.
Funds are a way to save for
irregular expenses (like car repairs, vacations, etc.).
In order to avoid this common oversight, it is best to add an extra line item to your monthly financial plan so you can be prepared when
these irregular expenses arise.