Author Topic: What non-monthly things to you budget for?  (Read 4230 times)

sevensquirrels

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What non-monthly things to you budget for?
« on: May 17, 2017, 09:19:07 AM »
If budgets are your thing...

What non-monthly things do you build into your budget? For example:

- Insurance premiums billed annually or bi-annually
- Property taxes
- Car repair fund

And how do you make sure that money goes somewhere it won't get accidentally used? Does it stay in checking? Same place as emergency savings? Investment account?

I'm trying to make sure I've got a comprehensive list of these things because they keep coming out of the woodwork, and while I have a nice little emergency savings fund, I'd really rather not use it for things that I could have seen coming from a mile away.

RWD

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Re: What non-monthly things to you budget for?
« Reply #1 on: May 17, 2017, 10:01:13 AM »
I don't really budget, but here are a list of some of our expenses that occur non-monthly:
  • Auto registration
  • Auto maintenance/repair
  • Auto/house insurance
  • House maintenance/repair
  • Real estate tax
  • Travel

I just keep a buffer in our checking/savings accounts (~six months expenses). Everything else gets swept to my brokerage investments. It's very unlikely that enough emergency expenses will hit at once that we wouldn't be able to pay off the credit card within a month. In the worst case scenario I'd just sell some stocks/bonds.

Also, our home insurance and real estate tax is stored in escrow as part of our mortgage payment, so we can treat those as monthly expenses from a cash-flow perspective.

JHoward

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Re: What non-monthly things to you budget for?
« Reply #2 on: May 17, 2017, 10:16:27 AM »
  • Vacations
  • Exercise shoes/insoles (these last me about 9 months before they start to make my feet hurt)
  • Gifts
  • Clothes - I try not to be a "clothes horse" but my body/daily dress code have been changing constantly through my 20's. I've decided that I'd rather acknowledge that I'll need a couple of things every summer/winter and budget appropriately than try to convince myself that my current wardrobe is adequate and then get blindsided when I realize in February that wearing long underwear every day requires owning more than one pair of long underwear.

I can currently handle these things with a buffer in my checking account. If you're looking for something more formal, YNAB's system really shines at planning budgets around irregular expenses. I've never used their software, but when my budget was tighter (and my pay was less steady) I adapted their system to my needs and while I kept all my money in the same account, I had a spreadsheet that accounted for all the money in my checking account with things like "christmas travel" and "new winter coat" allocated and was strict with myself about putting money aside for them every month and not touching it for lower priority "wants".

Cowardly Toaster

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Re: What non-monthly things to you budget for?
« Reply #3 on: May 17, 2017, 10:22:11 AM »
This is a good one, seems like I always get nickel and dimed by the this stuff that's nonroutine.

Here's a few things:

Tires
Costco renewal fees
Household wares
Hardware store trips
Wedding gifts
Hunting License

v8rx7guy

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Re: What non-monthly things to you budget for?
« Reply #4 on: May 17, 2017, 10:32:42 AM »
I have a spreadsheet that works like an escrow account that I put a certain amount in every month and it projects a year or so ahead for the following non-monthly items:

Life Insurance (quarterly)
Car Insurance (bi-yearly)
Amazon Prime Membership (yearly)
Visa Card Fee (yearly)
License Tabs (yearly)
Discover Pass (yearly, to park at state parks)
Garbage (every other month)
Haircut (every other month)

I have long term sinking funds for the following:

Vacation
Computers/Phones/Technology
Car Replacement
Major House Repair
Vehicle Maintenance
« Last Edit: May 17, 2017, 10:34:41 AM by v8rx7guy »

SilveradoBojangles

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Re: What non-monthly things to you budget for?
« Reply #5 on: May 17, 2017, 10:47:28 AM »
I am a budgeter, and YNAB has made setting aside money for periodic expenses super easy, with no need to move money around. You use the software to give every dollar of your income a job. For example, for periodic expenses I earmark money each month for  "Insurance and fees", "Car Maintenance", "Medical", "Gifts", etc. When we have an expense in one of these categories it deducts from the available funds in the software, so it's really easy to keep track of what is available to spend and what is not.

Prior to finding YNAB I had multiple sub accounts in my bank account and transferred money each month to keep it all separate. Now we just have a checking account and a high interest savings account, but make spending decisions based on what the YNAB software says is available, not on the amount of money in our account. We've been using it for 2 years and no problems so far.


Cranky

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Re: What non-monthly things to you budget for?
« Reply #6 on: May 17, 2017, 11:55:07 AM »
I admit that my budget is pretty squishy at this point, because I'm comfortable with what we spend and what we save. But I use a 3 tier system:

Regular checking account, with a $1000 buffer built in, for actual emergency emergencies.
2nd account at same bank, which we call the "house account", which is for non-monthly expenses and saving up for house renovations, etc.

 Investment accounts.

So, at the end of the month, I transfer the leftover money from the regular account to the house account, and then when the house account hits $X amount, I transfer the excess to the investment account.

lilvixen

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Re: What non-monthly things to you budget for?
« Reply #7 on: May 17, 2017, 04:29:44 PM »
We use YNAB too, and below are our non-monthly categories. We either divide the annual amount by 12 and save that each month or we assume a cap value and add an amount monthly until we hit the cap. Since we expect a usage in these categories within 2 years, we keep these in our online savings account for ease of access and peace of mind. Last year, we moved our Income Replacement (i.e. job loss) money from the savings account to a moderate allocation in a taxable account because the dust settled from my employer's acquisition, and I feel a little more safe.

Home
- Repairs (capped)
- Renovations (planned amount)
- Appliance/Electronics replacement (capped)
- Insurance deductibles, taxes, misc financial (capped)
- (Insurance and property taxes are currently handled in the mortgage escrow account, but they'll eventually end up here)
Auto
- Repairs (capped)
- Tires (capped)
- Smog/Registration (annual amount)
- Insurance (semi-annual amount)
Travel, Gifts, Misc
- Visiting Family (planned, annual amount)
- Emergency travel (family related, capped)
- Christmas (capped)
- Vacation
- Annual memberships (annual amount)
Health
- Medical (capped)
- Dental (separate due to expected expenses; afterwards, this will have a cap)

SwordGuy

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Re: What non-monthly things to you budget for?
« Reply #8 on: May 17, 2017, 06:20:09 PM »
Back in the day, I just got a large piece of paper, a pencil and a ruler.  I divided it into 24 columns, Jan 1, Jan 15, Feb 1, Feb 15, etc.

I penciled in the net income I expected to receive in the time slot it would be available to pay bills in.  I had to account for time to mail to be picked up and delivered, though for folks who pay online, those buffers are a lot smaller.

Then I penciled in the expected costs in each time slot it would be due in.   That way, I had a way to track annual and quarterly expenses, too.

From there, I would subtract all the expenses in each 1/2 month from their respective income so I could tell which time periods would have a surplus and which would have a deficit.  It really removed most of the surprises that shouldn't really be surprises.

Of course, now I would use a spreadsheet.


Aunt Petunia

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Re: What non-monthly things to you budget for?
« Reply #9 on: May 17, 2017, 06:27:15 PM »
Car insurance (every six months, but each vehicle is on a different schedule)
Tabs for vehicles
Car & house maintenance
Propane (prepay contract)
Trash collection ( I get a discount for paying annually)
Side of beef
Christmas
Vacations
Medical co-pays
Professional license and organization dues
I'm sure there's more but I can't think of them now.

I mostly just cash flow these because there is usually one thing every month. More gets invested in months that have nothing. I keep a $2000 cash buffer in a regular savings account, and might have to dip into it if one month has 2 or 3 things (the propane and the beef are the 2 biggest ones, and generally occur around the same time). I would withdraw from taxable investments if something really big came up.

nobody123

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Re: What non-monthly things to you budget for?
« Reply #10 on: May 18, 2017, 08:12:02 AM »
I have a spreadsheet that works like an escrow account that I put a certain amount in every month and it projects a year or so ahead for the following non-monthly items:

Life Insurance (quarterly)
Car Insurance (bi-yearly)
Amazon Prime Membership (yearly)
Visa Card Fee (yearly)
License Tabs (yearly)
Discover Pass (yearly, to park at state parks)
Garbage (every other month)
Haircut (every other month)

I have long term sinking funds for the following:

Vacation
Computers/Phones/Technology
Car Replacement
Major House Repair
Vehicle Maintenance

This.  I have my paycheck deposit split between checking and savings.  The amount that goes to savings is 1/24th (I get paid twice monthly) of the annual cost of all of the escrow items.   Then, when a bill for one of them shows up, I transfer the amount from my savings into checking to pay it.  I do charge as much as humanly possible to my credit cards for the rewards, so I typically only do one total transfer out per month, even if I had 5 items pop up over the course of the month.  My checking account pays for the monthly bills, sweep into my investment accounts, etc.

zolotiyeruki

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Re: What non-monthly things to you budget for?
« Reply #11 on: May 18, 2017, 08:53:59 AM »
We have a separate "Short term savings" budget that covers the following kinds of things:
HOA Dues
Car Insurance
Christmas
Curriculum (i.e. homeschool expenses)
Vacation
Save for future car replacement
Orthodontia (yup, our kids are hitting that magical age)
Major home renovations
Kids' summer camp

Any income tax refund and credit card rewards count against this amount, and we also transfer $xx/month into a separate account for these things.

catccc

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Re: What non-monthly things to you budget for?
« Reply #12 on: May 18, 2017, 09:48:37 AM »
Another YNAB users, a lot of the same stuff as others: semi-annual or annual insurance payment (car, renters, motorcycle, life), quarterly utilities, semi-annual tuition payments (when kids were in private school), car repairs/maintenance (includes annual registration), Christmas, new car fund.

omachi

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Re: What non-monthly things to you budget for?
« Reply #13 on: May 18, 2017, 10:18:56 AM »
Everybody's giving you great examples, so let me try to answer the question in a different way. I budget for everything, hopefully. If it is spent, it's assigned to some category in our budget. That's the whole point of a budget, right? If it weren't in the budget, where would the money come from? An outside income stream that also isn't in the budget? If savings is the answer then it isn't actually savings, it's savings minus all this other stuff not in your budget. It shouldn't be the emergency fund, poor planning is a poor emergency.

Back when I was starting my budget, if an expense was unexpected, the budget got updated. That happened with some frequency. New budget categories were created as new types of expenses entered my life. Otherwise, future budgets were made with that sort of expense now included in the proper category. Generally I'd reallocate out of budget categories that had some excess I could do without, rather than touch savings or the emergency fund.  If you have tracked previous years' spending or have your old bank statements, go through those when creating your budget categories and account for all the old expenses in categories for your new budget. That will reduce lots of surprises.

Now it's rare for anything to be spent that isn't somehow categorized in my budget. Maybe it wasn't a planned expense, but that either means adjusting future spending in that category (ordered a pizza so no dinner out later in the month) or the estimates were off (water heater broke before it was estimated it would need replacement) and allocations have to be adjusted in the future, which might mean tightening the belt elsewhere.

I also tend to over-estimate the budget categories' needs slightly under uncertainty, then reclaim it for savings at the end of the year (or longer on things like house expenses) when it isn't needed. To do that, though, you have to think of the budget as a limit, not a target.

momcpa

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Re: What non-monthly things to you budget for?
« Reply #14 on: May 18, 2017, 11:29:04 AM »
I don't really budget for those type of expenses in the normal way.  What we do is have our paychecks direct deposited to 2 different accounts.  Mine goes to a checking account.  That money is used for the usual monthly expenses....groceries, utilities, gas, phones.  As any excess is accumulated, it goes to investments/savings.  My employer doesn't allow for more than one account to direct deposit to, or I would have it split on payday.

My spouse's check goes into a different account.  It accumulates there for property taxes,  house and car insurance, new tires, replacement car, major repairs, etc.   The same as mine, though, as it gets above the amount we reasonably expect to owe during the year, it is moved over to investments.   

We've been doing this long enough that I have a pretty good handle on what the balances in both accounts should be.  Anything extra....INVEST.

Dora the Homebody

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Re: What non-monthly things to you budget for?
« Reply #15 on: May 18, 2017, 01:40:26 PM »
I keep a separate "savings" account and then a spreadsheet for all the monies in there, including:

-Heat (we are on oil, so some months cost $0 and some months cost $900, so I set some aside each pay)
-vacation
-clothes
-furniture/appliance repair or replacement
-dogs/cats expenses
-gifts
-health & beauty
-car repair/maintenance and licence fees
-home improvements/maintenance
-restaurant/coffee
-fun (small amount for gardening expenses and for outings with my Little Sister)

My horses have their own savings account so I can pay for hay once per year ($1600) and vaccines/teeth ($900) and insurance ($120)... also so that I can keep putting a "little extra" in there whenever possible to save up for my next horse purchase (hopefully not for another 10 years or so).

I add a little bit to each category on each payday.

I've been doing this for only a few months now, just to get a better idea of what I'm spending.

ditkanate

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Re: What non-monthly things to you budget for?
« Reply #16 on: May 18, 2017, 03:15:33 PM »
- Insurance premiums billed annually or bi-annually
- Property taxes
- Car repair fund

My main bank account is with Capital One 360.  They allow basically unlimited sub-savings accounts.  Since I get paid bi-weekly and expenses are typically paid monthly, I have sub-accounts set up for almost all of them. 

Main Checking - paycheck direct deposited here.
The next day I have auto-transfers set up from checking to the following sub-savings accounts:
Rent
Utilities
Car Ins (paid every 6 months)
Life Ins.
Emergency Fund
Personal Loan
Chase Credit Card
Car Maint.
Savings for upcoming trip

Many of the payments like rent, utilities, cc's etc can be set up to auto-pull from those sub accounts.  This way I'm virtually unable to accidentally miss a payment.

sparkytheop

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Re: What non-monthly things to you budget for?
« Reply #17 on: May 18, 2017, 03:30:01 PM »
I'm also a YNAB user (pre-subscription based).  I try to keep my money wherever it will earn the most interest, but still available when I need it (checking is 2%, CDs are about the same, money market account with Credit Union).  I just use my available balance to know what I have set aside for each category.

Things I budget for that are not monthly expenses:

Property taxes
Car Insurance
Natural gas (more in winter, pay ahead during the summer so I don't have constant small monthly bills)
Amazon Prime and Costco subscriptions
Household goods
Home maintenance
Photography club membership (even though it's only $25/year)
Post office box
Computer maintenance (mostly for my Kaspersky subscription)
Clothing
Car maintenance/repairs (includes oil changes, registration, tires, etc)
Health expenses (I have an FSA, but this helps fund things in case I go over reimbursement or don't get reimbursed)
Gifts
Christmas (this includes gifts as well as extra expenses, big dinner costs, whatever)
"Bulk Meat Purchases" (1/4 to 1/2 cow every year, buy chicken all at once, pork, bacon, whatever)
 Taxes (tax preparation expenses)
Car replacement (hopefully not needed for a very long time)
Emergency fund (currently funded)
Vacation
New house build
College (for son, add to monthly, spend each semester)
Charitable
"eating out" (we don't go out to eat very often)
Garbage (billed every other month)
"Fun money" (although I budget/spend from this monthly, it can vary widely and covers my fun stuff, concert tickets, books, hobbies, etc)
"Quilting" (because this needs its own category!)
« Last Edit: May 18, 2017, 03:32:17 PM by sparkytheop »