Author Topic: Irratic Expenses  (Read 2237 times)

slugsworth

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Irratic Expenses
« on: September 07, 2012, 06:24:03 PM »
I've been rehashing my budget and one of the things that I noticed is that in a normal month I've got a pretty high savings rate - but vacation/travel and home repairs are a big piece of my annual budget.

I've taken control of the expenses themsleves by just creating a seperate ING account so at least these are planned expenses, and I know there is no secret, but I'm wondering how other people handle large irratic expenses.

(The home expenses will stop soon enough - but ug.)

arebelspy

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Re: Irratic Expenses
« Reply #1 on: September 07, 2012, 07:11:00 PM »
Personally my high savings rate means we just pay for erratic expenses out of cash flow, and save a little less that month.

Then our spending jumps around on a graph of expenses (April spikes as taxes are paid, for example), but I have a line that shows the twelve month average, so I know what my average spending is, and annual spending.

Then some months are below, some are above, but I don't really care, I just pay whatever comes up, and save what I can.

Others more methodical than I may try to plan out things by saving monthly for the tax bill they know is coming, or saving for the next vacation, or saving in a car replacement fund.  I just pay for things as they come up.
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herisff

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Re: Irratic Expenses
« Reply #2 on: September 08, 2012, 08:46:40 AM »
Others more methodical than I may try to plan out things by saving monthly for the tax bill they know is coming, or saving for the next vacation, or saving in a car replacement fund.
This is what I do, because my income can be rather erratic (I'm an hourly worker who also does call). I protect myself by making sure I have the funds to pay property taxes, insurances, etc., no matter what's happening at work. When something unexpected does come up, that expense comes out of current cash and I can still pay the tax bill.

When I had a more steady income I didn't worry about it as much. I split my check so that annual and semi-monthly expenses were paid from one account, while I lived off the remainder (I re-checked the amount being split off annually to be sure I sent off enough), and that worked great until my monthly income became erratic.

icefr

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Re: Irratic Expenses
« Reply #3 on: September 08, 2012, 05:49:39 PM »
In my budget spreadsheet, I categorize expenses by frequency (monthly, bimonthly, annually, > annually) and then variable expenses by category. "Leftover" amounts in each category roll forward to the next month. So I budget for (property taxes / 12) estimation each month and that rolls over until I actually pay the bill. I tried divvying money out to targeted savings accounts for stuff like this, but I found it better for me to keep it all in my checking account and track it in a spreadsheet.

For things that I don't expect at all, I just pay for out of cash flow and put less into savings that month.

My income is high enough that, like arebelspy, I could just pay everything out of cash flow, but I like keeping track. This way, I know how much to add to my checking account each month out of my paycheck and how much I can save.