Are you still running out of money at the end of the month despite following your budget? Iregular expenses may be throwing you off your game. These are bills that you only pay once a quarter, once a year, or on an as-needed basis. They are not always on top of your mind and their nature makes them easy to forget until they are due. As a result, you scramble to raise the cash to pay them in time!
Of course, it would be better to get out of this cycle, and taking the surprise out of irregular expenses is fairly simple. Plan ahead, identify your irregular expenses, get the sum, and divide the total by 12 so you can turn them into a single monthly bill that can go into your budget. Following is a detailed strategy on how to get it done.
List your irregular expenses
Any infrequent but predictable bill falls under irregular expenses. There are many examples including vet bills, certain tupes of subscriptions, car insurance, childcare, home repairs, vehicle registrations and more. Sit down and identify all the bills that you pay quarterly or annually and list them down.
Do the costing
After each item on your list, assign a cost. In some cases, this can be as simple as looking up the cost, while for other entries, you must do your best estimate and budget for yourself. If you are unsure, check your previous bank statements or records to see how much you have spent. Calculate everything and divide the total by 12. Set this figure aside every month to cover all of your irregular bills for the year.
Where to put the money
It may be a good idea to set up a separate savings account for irregular expenses. Just move the money there every month once you receive your salary. If you find it harder to discipline yourself, open the account in another bank or somewhere that you cannot withdraw easily. Now as the irregular bills come, just pay them from your new account and have no stress!