Budgeting is about creatively exploring possibilities. The underlying question is, how can I create the life I want? If we are determined enough, we will find the answer.
And once you have a budget that works, you can make spending decisions without guilt or uncertainty. If you want to skip the Choos and buy his 3 pairs of heels from Famous Footwear, you can do that too. Your budget gives you the power to make those choices. Budget is not a limit. set it free
When budgets go awry
Sadly, we only reach a point where spending is released when the budget is complete. Missing out on spending here and there basically puts you in financial trouble. You live within your budgeted spending parameters and you run out of cash anyway. Your natural reactions from there may include:
- Get angry.
- Cut your life’s budget.
- Spend what you want and charge your credit card the overrun.
Big mistakes in budgeting
A big mistake in budgeting is underestimating your bills, especially non-monthly bills. These are expenses that you pay one to four times a year instead of monthly. Forgetting to budget for these will leave you short on cash. You’ll need to use your credit card debt or cash savings to reach your goals.
Examples of these non-monthly budget-killing expenses from my life are:
- Insurance fee
- HOA fee
- Gifts: Holidays, Birthdays, Anniversaries
- holiday
- Tax preparation fee
- Sam’s club membership fee
- Veterinary costs for pet checkups and vaccinations
- glasses and contact lenses
- car registration fee
- Quarterly tax payment
Writer Abby Hayes gives additional examples of these off-cycle bills in her article. Click here for US News & World Report.
How to budget non-monthly bills
The trick is to add these items to your budget and allocate a monthly deposit for each. If he expects his quarterly tax bill to be $1,000 every three months this year, he will save $333 each month. To also cover $1,200 in auto insurance premiums for 12 months, you can save an additional $100 each month.
If you do this right, you’ll have cash on hand to cover when those bills come due.
Tools for budgeting non-monthly bills
Two tools can help you account for these non-monthly expenses: the right budgeting app and the right bank account.
1. Good budgeting app
I’ve tried a variety of budgeting apps and have found them all to be inadequate for a variety of reasons. Budgeting your monthly quota for yearly and quarterly bills requires manual work and transfer it to the app.
That concludes my rant about budgeting apps.
Use a spreadsheet instead as it has all the data and calculations in one place. I created his 50/30/20 budget spreadsheet specifically for this purpose. This is to calculate what you will be saving each month to cover your off-cycle bills. If you subscribe to Budget Fashionista, you can download the spreadsheet and use it for free.
side note: Send us your feedback once you’ve used Budget Fashionista’s budgeting spreadsheet. I haven’t covered every possible scenario, but your feedback will help me get there.
2. Correct bank account
You’ll also need a checking account that supports automatic deposits to your linked savings account.i do this capital one.
You may prefer banks that support smaller savings goals. These allow you to allocate buckets of funds for specific purposes, such as HOA fees or annual canine exams. Here are some banks to consider:
Organize your bills — including annual bills
A successful budget documents all expenses, even on invoices that are rarely shown. But once you’ve worked through that portion of your budget, the fun begins.You can play with the numbers until you’re happy with the results. Choose where to save and where to splurge.
This is where budgeting is good. Once you get the numbers right, you can enjoy your allotted splurge without feeling guilty.