Compared to fixed budget expenses such as rent, mortgage, car or other regular monthly payments, non-monthly expenses are easily forgotten when budgeting. Even with variable expenses such as groceries, gas, utility bills, etc., you typically know or can estimate the amounts to budget for.
Unfortunately, irregular expenses, variable expenses, non-monthly expenses or impulse purchases can be budget busters. Generally, for many people, these include vacations, unexpected taxes, emergencies, car repairs, holiday gifts or impulse purchases. Budgeting and planning ahead can help ease the financial impact and stress when the unexpected comes up.
Not a budgeter, you say? If you earn money and spend money, you budget! Whether you keep a spreadsheet down to the penny or toss your bills and receipts into a drawer, it’s easy to forget about non-monthly expenses.
Who experiences non-monthly expenses?
Everyone! These sneak-up-on-you expenses can feel like emergencies, but you can budget for them. You can also save up for things that are long-term, planned purchases.
Review your last few bank and credit card statements to see if you’ve had a budget buster. Did you see that expense coming? If you did, it’s something you can prepare for the next time.
How to budget for irregular expenses
It is important to understand how you spend your money. Examine your bank account or credit card statements and look for expenses that are not already budgeted for. Make a list of things such as routine car maintenance, insurance deductibles, birthday and holiday gifts, etc. Look ahead for the year and see if you have any scheduled trips or events so you can budget and plan ahead for those expenses.
Utilize a budget calculator to help you get started on creating a budget to include the expenses you identified or see where you could cut back on spending.
Irregular expenses examples
- Insurance premiums — (Homeowners, Auto, Life, Health, Disability)
- Home — (Property taxes, Appliances, Furniture, Lawn care)
- Auto — (Repairs, Maintenance, Tires, Registrations)
- Health — (Medical bills, Glasses, Check-ups, Deductibles, Dental work)
- Education — (Supplies, Testing, Tuition, Registration, Fees)
- Pet — (Insurance, Veterinary care, Vaccinations, Grooming, Boarding)
- Leisure/Hobbies — (Dining, Movies, Vacations, Sports, Gifts, Mobile devices)
Manage non-monthly expenses with separate bank accounts
Taking control of non-monthly and annual expenses can help make sure they don’t blow up your budget when they happen. Having a clear game plan for the money you earn is the foundation of smart money management.
Try keeping your non-monthly expense account(s) separate from your main banking account. Separating these from the rest of your budget is one way to prevent being caught off guard. Keeping them separate helps prevent possible temptation while you save.
Create an emergency fund
It is difficult to plan for the worst but if a financial emergency hits, planning for financial emergencies will make the time less stressful for all involved. It helps to have an emergency fund.
Using a savings calculator can be helpful in determining how much you should save in your emergency fund.
You got this
Now you know that “came out of nowhere” expenses have another name: non-monthly expenses. With a little knowledge and some pro tips, you’ll be ready to pay for that extra gift, plane ticket or new license plate sticker.