canadiandebtgirl

Yearly Expenses

In Uncategorized on January 16, 2010 at 8:00 am

There are some infrequent items that are just hard to account for in your monthly budget. Things like your annual car registration, birthdays, Christmas, annual vet visits, car maintenance (oil changes and miscellaneous), clothing and hair aren’t monthly occurrences.

For 2010 I decided to contribute to an ‘Annual Expenses’ Fund monthly for these line items. Here’s what I have:

Whenever one of these budget items comes up, I pay for it out my normal chequing account and then reimburse myself with a transfer from savings out of this dedicated fund.

So far it is working well. I will adjust amounts as needed, but so far these ones are fitting the bill.

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  1. That’s a good idea.

    If you know the fixed amount for the items, then setting up a monthly cost makes sense

    For me, it’s less that.. I prefer just saving the money in general and then grabbing it out when I need to pay for something that isn’t frivolous

  2. Those yearly expenses can be ones that are often forgotten by those who are newer to budgeting and planning. Excellent job in setting aside the money so that it is there when you need it.

  3. I call this my Freedom Account and it works wonderfully… I’ve had mine since 2003 and I’ve never run out of money in there… I keep putting some in each month no matter what the overall balance is and I’ve added categories over the years (I now have 14!).

    I love this “tool” better than anything else in my budget!

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