11/16/2023 0 Comments Flexible expenses from month to monthThese can be as simple as adding a specific amount to a savings account each month, or as complex as getting ready for retirement. The basic use of a budget is to help set a financial goal. Here are a few tips for getting a budget started. Creating and using a budget can help you have an easier time during tax season, lets you find ways to save and can help you spend more wisely. Financially, clearing the slate and starting over again is one way to set the New Year off on the right foot. We sometimes resolve to make the New Year “our year,” start new diets, begin new exercise regimens and wipe out the things in our lives that didn’t quite work out. Only use this option if you are certain you have enough cash flow to pay off the credit card each month.Celebrating the New Year is often a time of renewal. If you manage your credit well and are able to pay off your credit card in full each month, there is potential to earn points (which can translate into free groceries or merchandise) with your regular bill payments. If you have the cash flow, use a points credit card to make bill payments. This is especially helpful if you are paid twice a month so you can pay a few expenses out of each pay period. It is easier to manage a few expenses at a time and spread bill payments throughout the month. If you find all of your bills are due on the same day each month, call the utility companies, or other creditors to ask if you can move them to a different day. Spread your monthly bills throughout the month. For some families, setting up monthly payments is a good option as it can be difficult to save throughout the year for one large payment. For example, property taxes (which are an annual expense) can be set up to be paid semi-annually or monthly. There are some large annual payments that will accommodate for you to make more frequent, smaller regular payments. Turn annual payments into smaller, more frequent payments. It is a good idea to build up an emergency fund of savings that will enable you to meet unexpected expenses when they happen, so include them in the calculation of what to save each month. They are difficult to plan for, but to estimate what this expense might be for the year, use the total from the previous year and make an educated guess. They include unplanned expenses like car repairs, new appliances, emergency dental and home repairs, etc. Irregular and Unexpected expenses are generally emergency and maintenance expenses that come up and need to be paid. Quarterly expenses (paid 4X per year) may include vehicle insurance, water/sewage bill and Blue Cross or other private health insurance plans. Semi-annual expenses (paid 2X per year) may include things like tuition, driver’s licence and house insurance. Now divide this yearly total by 12 to calculate the amount to save each month to be ready for the expense:Īnnual expenses (paid 1X per year) include income tax, property taxes, property/contents insurance, fishing and hunting licenses, membership dues. The amount to save each month to be ready for these expenses.Īdd this savings amount to your monthly budget calling it Savings for Annual Expenses.įor example, if you know you will pay $200 to Autopac for vehicle insurance four times per year, calculate the annual amount of this expense: Using the Total Annual Expense calculated, divide by 12 to find Use the previous year’s expenses in your calculation.Ĭalculating for annual and occasional expenses Here is a chart of how to calculate how much money to set aside in savings each month to be ready for occasional expenses when they come up. When the expenses come due, pay out of this account. Try to set some money aside each month and put it into a separate savings account as part of your budget plan. Because they are not paid every month, planning is necessary to ensure the money is available when they are due. There are a variety of important expenses that are not paid monthly.
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