How to Budget for Irregular Expenses that Sneak Up On You

By Jackie Beck   Updated 05/10/2021 at 8:05 am

Budget busters can leave you wondering how to budget for non-monthly items. While in theory we should remember that the holidays and our car tags arrive every year like clockwork, the reality is that it’s pretty common for them to be upon us before we know it.

Time flies while we’re busy with other things. It’s understandable, but letting irregular expenses sneak up on us like that can cause problems.

So it pays (sometimes literally!) to figure out how to budget for those types of expenses.

That way, instead of freaking out and wondering where you’re going to get the money, you can just use the money that you’d set aside in advance. Here’s how to budget for non-monthly items.

Start with a list

Make a list of what your non-monthly bills are. Skim through any records of your spending over the past year that are available, such as bank statements, credit card statements, or any software that you use. Note any bills or expenses that don’t repeat every month, along with how much you spent on each one and how often they occurred. Some of those might include: taxes, home & auto insurance, household repairs, pest control, car repairs, car tags, Christmas, birthdays, weddings, back-to-school shopping, subscriptions, vet bills, etc. (Check my budget printable if you want more suggestions.)

Don’t be tempted to toss something out because you think it’s probably not going to happen next year. Maybe it won’t, but chances are something similar could. And what’s the worst that could happen if you didn’t have the expense after all — having some extra money saved up?

If you forget something, you can add it when it comes up. If you can’t find the amounts, just guess. Your list won’t be perfect right off the bat, but it’ll get closer and closer as time goes on.

Total things up & organize them

Next, add up how much you spent for each individual area/type of expense over the past year. (If the idea of having putting your expenses into categories makes you cringe, go ahead and add up the grand total — but I’d recommend using budget categories if you don’t hate the idea.)

For example, if your list of irregular expenses for the past year looked like this…

New tires $300
Ann’s wedding gift $50
Replaced car AC $600
Car tags $157
Blog hosting renewal $108
Christmas gifts $400
Tom’s birthday party & gift $128
School clothes $350
School supplies $75
Surgery for dog $700
Car insurance $320 (twice a year)
Mia’s birthday party & gift $154
Trip to New Jersey to visit relatives $739
Summer camp $500
Shots for the dog $53

Then your categories and totals could look like this:

Car expenses $1697
Gifts $732
Blog expenses $108
School $425
Vet bills $753
Travel $739
Summer camp $500

(Isn’t it amazing how much more expensive things look when they’re grouped like that? But that’s how much pretend-you was really spending.)

Divide (and conquer)

To figure out how to budget for those items. just take the totals from each category and divide by the number of times you get paid per year. So if you get paid twice a month, you’d divide by 24. If you get paid every two weeks, divide by 26. Round the totals up to the next dollar, or to the next $5.

Let’s say you get paid every two weeks. That would bring our example amounts to:
Car expenses $66
Gifts $29
Blog expenses $5
School $17
Vet bills $29
Travel $29
Summer camp $20
Total: $195

Start saving with each pay period

Now that you know what those kinds of expenses cost you last year, you can start saving up for the next time they come around. It’s best to do so automatically. Set up direct deposit or an automatic transfer from each check for either the total amount that you need to set aside with each paycheck, or for the amount you need to set aside for each category with each paycheck.

I like having my accounts clearly labeled so I don’t forget what they were for or spend the money on something else, so I have several smaller accounts. You may not like the extra transactions. Both ways work though. (Some banks allow you to set up what are commonly called sub accounts, and many employers will allow you to direct deposit to more than one account.)

Keep in mind…

Keep in mind that your non-monthly expenses probably won’t be exactly the same each year. The number of expenses may change, and/or the amounts may change. Life happens, and it’s not necessarily orderly. But that’s why you adjust as you go along, which is an important part of how to budget for those types of things.

As a huge bonus, the more you plan and prepare, the less likely you will be to turn to debt.

Remember, debt is not the problem. It’s the symptom.

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One thought on “How to Budget for Irregular Expenses that Sneak Up On You

  1. My wife uses “You Need A Budget” and I think this is their basic approach.

    Definitely a great way to do it! What will your unpredictable expenses be? Probably similar to what they were in the past.

    Many landlords fall into this problem. They replace a roof on one of their houses but don’t consider it an expense because “that’s a one time expenses”, but next year there’s another big ticket repair.

    It’s always something, and looking at your past spending is a great way to anticipate the future.

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