Comments on: Annual Expenses: When Dividing By 12 Doesn’t Work

By: 10 Things To Do Before Creating Your Next Budget by No Credit Needed

Mon, 11 May 2009 11:30:51 +0000

[...] Remember, for a budget to really work, you need to plan for non-monthly (irregular) bills and expenses. For instance, you may need to pay annual life insurance premiums, twice-yearly automobile insurance premiums, and property taxes. These bills do not arrive in your mailbox each month, but they still need to be included in your budgeting plans. Click here for several options for how to deal with annual / irregular billing cycles. [...]

By: Top 10 Ways To Save Money - Number 2 - Live On A Budget by No Credit Needed

Mon, 01 Dec 2008 01:05:51 +0000

[...] Annual Expenses – (Here’s how to handle annual expenses, things like life insurance premiums or car tags.) [...]

By: Living On A Budget: Don’t Knock It Until You Try It

Living On A Budget: Don’t Knock It Until You Try It — Sat, 12 Apr 2008 13:49:09 +0000

[...] Annual Expenses: When Dividing By 12 Doesn’t Work [...]

By: Stngy1

Stngy1 — Thu, 07 Feb 2008 19:18:47 +0000

I WANT to do Option 3, but when I’ve calculated the total amount we would need to set aside per month, we are too close to the financial edge to make it! So, THIS year, until we get a better grip on things, the plan is a mix of #4 & #5. Since biweekly paychecks gives you two extra paychecks a year, and we will have tax returns, I’m hopeful we’ll have enough. If not, there’ll be monthly payments to insurance companies. The debate at that point becomes does extra money (per month) go to pay off these bills OR to pay down debt OR to save up for next year
BTW, for medical, and other deductibles I have (phew) socked away enough. We have a medical FSA so if I have to, I pay out what we owe then replenish when we get reimbursed. If a biller can wait a month=non issue!
I have to say this is definitely the hardest part of a budget! Thanks for addressing it and allowing others to share their strategies. I would also love to hear what folks factor in as annual expenses. My list includes a few annual fees, two annual utility bills, insurance, property taxes, car registrations, tuitions, and [most fun] Gifting.

By: ro

ro — Thu, 07 Feb 2008 16:46:29 +0000

What I do is I count the weeks from now to when I have to send the payment and then divide the amount by the weeks, and each week I have the money automatically transferred to my savings and don’t touch until the bill is due. This works for me and my husband because he get’s paid weekly so every friday the money is gone so it is like we never had it the first place.

By: 2007 - No Credit Needed Year-End Review (May)

2007 - No Credit Needed Year-End Review (May) — Wed, 19 Dec 2007 14:41:52 +0000

[...] May 29 – Annual Expenses: When Dividing By 12 Doesn’t Work [...]

By: SJean

SJean — Tue, 18 Dec 2007 22:47:12 +0000

I do option 4. Simpler for me and it works out the same in the end.

By: Ben

Ben — Fri, 01 Jun 2007 01:28:44 +0000

If you get paid every fortnight there are actually 13 months in the year. 26 pay packets divided by 2 gets you to the 13 months. This is a factor for option 3, which I use for annual expenses.

When I pay an annual expense I forecast how much it might increase the next time it’s due and I adjust my saving category accordingly.

By: Karen

Karen — Tue, 29 May 2007 21:32:21 +0000

I do option 3….only I do it by taking the total amount I’ll need for all of those categories and divide by 52. Then every week ING automatically takes that much out and it’s there when I need it.

By: Mike

Mike — Tue, 29 May 2007 20:38:06 +0000

If I have not already budgeted for irregular expenses, I “borrow” from my savings account and then “pay myself” back in monthly installments over a period chosen based on the amount of the expense.

For example, I get a discount for paying my car insurance in one lump sum, so I pay in cash, and then pay myself back in monthly installments. I do it all by setting up reccuring transfers to my EmigrantDirect account.

Depending on the mood I’m in when I set up the transfers, I even include interest that I’m losing by not having the money in my account.