Life has a way of throwing us curve balls when it comes to our finances. While it’s true we can’t plan for all of those curve balls we can make a plan for the ones that we know are coming. A lot of people know they have some annual expenses coming up but they are out of sight and out of mind until BAM there it is.
Here you are now trying to figure out how in the world you’re going to come up with this money when it wasn’t in your budget and stuff is already tight. There goes that BUDGET you just planned for the month. It doesn’t have to be that way. You just need to put a plan in place to help you deal with those unexpected but actually pretty expected bills.
Budgeting for annual expenses isn’t that hard. All you have to do is figure out how much the bill is going to be (even a ballpark figure) and then divide by 12, and then every month you set 1/12 of the payment aside each month.
You could either put it in a ENVELOPE or in a savings account. I know some people say you can just leave it in your checking account, but I don’t like to do that because it’s easy to mix it in with your monthly bill money.
1: Car registration
I don’t know how it works in your state but here in Florida on our birthday we have to renew our car tag ( what a birthday gift!). The cost doesn’t really change that much from year to year (it actually went down a dollar last year), so it’s easy for us to plan for. It costs us about $126 for our two cars so I divide that by 8 ( I start planning for it in January and we renew in August) so I put back $23.25 back every month.
I like to spend no more than $100 on our kids birthday gifts. We have 4 kids to buy for so I put $33 a month back for birthdays. As for other family members and friends I pick small toys on clearance and put them in our “gift box” throughout the year. That way when we go to a party of something the kids can pick from that box for the birthday girl or boy.
3: Doctors visits
Our check ups are free, but we have a copay for sick visits. Right now that copay is $35. I put back $24 a month for copays. That allows for 2 sick visits a year for each child plus their free annual check up.
Do you have homeowners insurance? Car insurance? Renters insurance?
If you look at your policy you might notice you get a discount if you pay every 6 or 12 months rather than monthly. It’s not always easy coming up with that chunk of change though. It’s a whole lot easier if you save up for it every month rather than waiting for your renewal to hit the mailbox.
I bet when you brought that little furry ball of fluffiness home you weren’t thinking about the cost associated. Well pets cost a lot sometimes, but you can plan for it. Check over last year’s statements and see how much you paid. Divide that by 12 and there you go. Don’t forget vaccines and check up costs.
We don’t have warehouse clubs fees or anything because my husband’s job pays those for him, but if you do plan for those.
Make sure you also plan for your taxes like income taxes and property taxes
8: Home maintenance
10: New tires ( I always forget this one until my husband reminds me)
Your expenses will vary depending on where you are and what you have to pay but there are always annual expenses you should plan for. I love this budget book I made for keeping track of my yearly expenses and even my month to month expenses.