Imagine it is a new month and your spending plan is finally complete. Every dollar has a job, and you are prepared to execute your plan. Then, your property taxes (or insert any unplanned expense) arrive. And oh, by the way, you just got an invite to your friend’s birthday party.
While these are unexpected expenses, they are also a blessing because property taxes indicate ownership, and an invitation indicates a relationship. Both of these events are blessings, but the unexpected expense could leave you frustrated on how to stay within your spending plan.
How to Plan for Irregular Expenses
It is easy to remember the monthly expenses because they happen frequently, but irregular expenses can catch you by surprise and throw your budget out of whack. A good way to plan for irregular or unexpected expenses is to set reminders and anticipate the unexpected.
For irregular but recurring expenses such as property taxes, take some time to review and make a list of the last years’ expenses. As new expenses come up, continue to track them throughout the year. Remember to record the amount and month it is due.
Once you have a list of your expenses, create a reminder on your calendar. Set the reminder for the month the payment is due to make sure you include it in your spending plan. Set another reminder for the payment date.
Lastly, save a small amount every month in a sinking fund to cover unexpected expenses that might occur.
Irregular Expenses To Track
Below is a list of some irregular expenses that are often forgotten but should be in your spending plan.
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Professional Association Dues
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Car registration
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Property taxes
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Car/ Life Insurance
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Subscription Services
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Video Streaming Services
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Membership Only Retail Stores (i.e. Sam’s Club and Costco)
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Continuing Education Membership Programs
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Car Preventative Maintenance
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Car Repairs
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Homeowners Association Dues
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Heat Ventilation & Air Conditioning (HVAC) Preventative Maintenance
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Pest Control
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EZ Pass Fees
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Birthdays/Holidays
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Doctor Visits or Procedures
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Gifts for Teachers or Coaches
How to Pay For It
If you find yourself in this situation right now, then practice these practical next steps. First, decide if the expense needs to be paid now or can it wait until your next payday.
If the expense must be paid now, assess your spending plan and make tradeoffs for what can be paid later. Try your best to stay within the spending plan, unless you plan to earn more money.
If you are not able to cover the expense in your current budget and not able to make more money at the moment, then reallocate from your sinking (savings) fund. Make sure you plan to replenish your savings the next pay cycle. As a last resort, use a credit card, but plan to pay it off by the payment due date.
Conclusion
Even when you try your hardest to get it right, life still happens and you must adjust. As you go through this year, take note of any unexpected expenses and plan for them moving forward. With the right attitude, there is nothing you cannot tackle including your money.
That’s getting your Finances On Point.