In this last post of the series, I will discuss saving for known irregular expenses. These are expenses that you incur 1-4 times a year but not every month. These expenses are often forgotten and surprise us each time. Similar to how a mortgage company holds your taxes and insurance in escrow and pays it 1-2 times a year, you should do that for your own finances.
What to Budget –
- Gifts (Birthdays, anniversary, wedding, Christmas and other holidays)
- Annual vacations, camp for kids
- Insurance (home, auto, life, long term care, disability, etc.)
- Taxes (Car, home, quarterly income tax payments)
- Non-monthly subscriptions, membership fees, and tickets
- Education expenses (tuition, & back to school supplies)
- Irregular utilities (water, propane, etc)
- Personal insurance (life, long term care, disability, etc)
- IRA contributions (if made annually)
- Grooming (personal hair/nails and for your pet!)
Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified investment, tax or legal advisor. All of these examples are estimates and should be taken as such. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual.