Real world money question:
“How do you budget for expenses that occur not monthly but quarterly, twice a year, every other month, etc?”
That is a great question. Many people struggle with expenses that just seem to pop-up that you didn’t budget for, and these expenses can throw off your budget pretty quickly.
Here’s what you do for expenses that don’t happen monthly… what you need to do is figure out what the cost of that expense for a full year would be… you then take the full cost and divide by 12… and then you take that number and you set aside that much money every month so that when you need to pay the expense the money will be sitting in your account.
A good example of this would be your vehicle registration… let’s say you pay $120 once a year to register your vehicle. What you do is you take $120 and divide by 12 months… which is $10… you then put aside $10 every month and then after a year your will have $120 sitting in your account to pay for your vehicle registration.
When you’re creating your first budget you should try to figure out as many of your non-monthly expenses as you can so that you can set aside money for them each month. But chances are you won’t remember them all (that’s totally normal) so when a new non-monthly expense pops-up figure out the monthly cost of that expense and start putting money aside right away.
Non-monthly expenses are one of the reasons why it takes a full 12 months of budgeting to really fine tune your budget. After 12 months of budgeting the chances of an unexpected expense surprising you goes way, way down.
Do you have a budgeting question? If so, add it to the comments below.
Tammy