Sunday, February 24, 2013

Budgeting for Irregular Expenses

I have never budgeted for irregular expenses but the unusual thing is that I pay for all expenses annually or biannually if I can. In the past, I would just pay for them out of our regular cash flow or take the money out of savings is needed.

We've had a ton of these lately and I took the time and effort to make a list of all our irregular expenses.

Auto insurance
Property taxes
Life insurance
Motorcycle insurance
Motorcycle and automobile tabs
Garbage pick-up (quarterly)
Home insurance

The total is a whopping $4155 or almost $350 per month. I still have my old ING, now Capital One account, that I haven't used since we built our house. I'm going to start an automatic transfer for $175 bimonthly to account for these items. I've thought about increasing it to $200 biweekly to cover Christmas as well but I'm not sure about that.

What is your system?

2 comments:

  1. I budget the same way you do for irregular expenses.. thankfully it's not as many! lol! I split up the bill into however many months I have to pay it, and put in xx amount each month into a seperate account.

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  2. Honest to goodness, you hit on the reason that we couldn't get out of credit card debt for so long!All the birthdays, and every other thing that came up every year but I never budgeted for was what was keeping us down. Now I set aside about $4000 for everything and our lives are so much better. Everyone talks about their monthly bills but doesn't take time to see what it is that is holding them back.
    Good job!!!

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