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Predictable Irregular expenses are a key to realistic budget

December 26th, 2014 at 04:34 pm

I'm trying to compile a list of regular expenses that are not unexpected, but most people do not include them when they think of their budget. Every time I hear a caller to a finance show, I can't help but think that people neglect to include those, and if their budget is tight, over time it adds up to a deficit.

I am building a detail sheet, and as those expenses come up, I add them to the sheet not to forget. That way if I ever need to do some long term planning or see if I can afford something, I have a realistic picture.

I mean things like:

Replacing tires and break pads, even if once every 3 years, registration/license renewal fee/inspection fee. (car maintenance is not just oil changes).

Holiday tips

Birthday parties

Annual memberships to Botanical Garden, Lego Land, Zoo, etc...

Annual credit card fees (for hotel cards, where the value of a free night is higher than the fee).

Turbo tax every year

Domain name hosting

Months where bi-weekly mortgage hits 3 times

iPhone upgrade for one member of the family once a year (if we are going to do it, might as well not be in denial about it and reflect it in the budget).

Car and life insurance that are paid annually/semi-annually

None of these are "unpredictable", but a lot of people see them this way when they come up. And they do add up to a significant number that should not be ignored.

Any others I'm forgetting? What are yours? My goal is to build the most comprehensive and accurate list possible.

12 Responses to “Predictable Irregular expenses are a key to realistic budget”

  1. CB in the City Says:

    Excellent list!

  2. LittleMissSplendid Says:

    In addition to the ones you've listed I would add:

    Private mailbox/PO Box
    AAA/Motor club/Tow service

  3. Beawealthywarrior Says:

    I also keep a list of expenses like this that also includes home maintenance, vet bills and things of that nature

  4. creditcardfree Says:

    School registration fees
    A/C and Furnace maintenance

  5. scfr Says:

    We have many of those already mentioned in your post and the others add-ons, plus:
    Property Taxes (a once a year big payment for us since we have no mortgage)
    Estimated Income Taxes (4 times a year)
    Medical/Dental/Vision Deductibles & Co-pays
    HOA dues
    Costco membership
    Gifts

    Here are some that we don't currently pay but many probably do:
    Periodic extra home cleanings (carpet cleaning, roof or deck cleaning, drapery cleaning, etc).
    Veterinary expenses beyond routine exams & preventatives


    Others that need to be planned for, and it really doesn't matter the approach an individual prefers (EF, sinking fund, part of regular budget, savings goals, etc) as long as it's planned for:
    - Major car repair
    - Major home repair
    - Home appliance replacement
    - Car replacement

    And I suppose some people have dreaded bank fees.

  6. rob62521 Says:

    Real Estate Taxes, even if they are paid as part of the mortgage...if taxes go up, the mortgage payment goes up.
    Lock box fees

  7. PatientSaver Says:

    how about ink cartridges for the printer?

  8. buckybadger Says:

    Maybe I have a different budgeting paradigm than others, but this level of hair-splitting seems counter productive. Maybe I'm not understanding the amounts?

    How much is a zoo membership? How much is an annual fee on a credit card? How much is car registration? Around here, none of these are more than a few hundred bucks. Turbo Tax? Isn't that like a hundred bucks? Even if they all hit at one time it would still be manageable.

    I understand how if you're a low income earner it's important to keep track of these, but Nika - you guys make a lot of money. Why don't you just have a slush fund of a few thousand dollars that you pay these sorts of things out of? Then just replenish it - like a non-emergency fund.

    We just keep an extra $3-4k in our checking account and we don't have to worry about stuff like that. It's mot like rates are so good you can't keep some extra in checking. Or keep it in a saving account attached to the checking.

    You spend more on a single brunch that the cost of Turbo Tax, so I guess I don't see why you would need to budget for something like that all year long.

  9. Nika Says:

    Buckybadger, normally we do absorb those cost into the cushion we leave in the regular budget or checking account, or adjust something else that is more or less discretionary.

    However, these things add up to few hundred dollars a month, averaging out to about $600. So I need to have a realistic picture of true expenses. For example, if I want to have a baby and stay home for a year or 2 years, this is 12K extra, on top of what I think we spend on fixed expenses, and that amount matters. Or if we are aiming to move and get a bigger mortgage, or something like that. When calculating for something long term, omitting these things from a budget can get one into trouble. That is why I wanted to calculate "life" category as close as I could, for the purpose of long term planning.

    BTW, we don't make "a lot" of money for NYC.

  10. buckybadger Says:

    You make enough to live in NY - that's (almost by definition) a lot more than other people ;-)

    But what I really meant was my last paragraph about one brunch being equal to the cost of Turbo Tax. In my opinion, if you make enough to spend the amount of discretionary income that you guys do (at least what you share in your blog) like brunches and two iPad airs, it seems silly to stress over the cost of turbo tax and printer cartridges.

    If you need to cut luxuries you have lots of room to do it so why stress out about it? It's not like you can barely make your mortgage payment. And you're paying extra on your car, right?

    We're the same way on a smaller scale. We eat out a lot. We spend lots of money on stuff that could be cut if we wanted or needed to. But I'm not going to stress out about keeping, say, Hulu Plus, when a whole year of it costs less than what we blew on one nice sushi dinner for new years eve.

    I understand your issue better now that you've explained it, though. We just approach our budgeting from a different angle. We save what we plan on saving and spend the rest. If we don't have enough for the essentials, we cut the discretionary stuff. We have a cushion to let this ebb and flow work for us.

    But I hope your method continues to work for you! Good luck!

  11. buckybadger Says:

    I meant to add that if you're considering taking 2 years off to have a baby you'll definitely need to look ahead. Just don't forget to keep the big picture in mind. People tend to lose the forest for the trees when they budget into minutia.

  12. Buendia Says:

    I budget for all of those irregular but predictable things and I set aside money each month from my budget... here are a few that I have:
    - summer pool membership
    - safe deposit box (only $30/year, but still...)
    - annual HOA dues
    - passports (we have 7 total and they expire at various times - I keep a list and budget in the beginning of the year)
    - summer camp for our daughter (I set an annual budget)

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