SPREAD OUT YOUR SPENDING
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If you’re anything like us, your monthly budget is a well-examined work-in-progress. Maybe you compare your spending by category to the previous month’s spending and pencil in an amount for next month. Maybe you debate which subscriptions to keep and which to jettison to justify spending somewhere else. Maybe you’ve called every utility provider you have in order to get a lower rate.
But then…but then your cat needs a trip to the vet. Your car needs to get serviced. Your car registration bill comes in the mail. Your annual Amazon Prime subscription drops without warning on your credit card, causing it to yelp in alarm. You realize your sister’s birthday is next week and you haven’t gotten her a present. None of these things fit into a budget category.
Let’s take a look at the big picture here. Some things you just can’t predict. So for those things that you really, truly don’t see coming, give yourself some grace. This is why you have a miscellaneous category in your budget, and this is why you’re building that emergency fund.
But some of those expenses weren’t that unpredictable, were they? Your cat goes to the vet every few months. Your car gets serviced a couple times a year. Despite sneaking it onto your bill like a thief in the night, Amazon is actually pretty predictable about that Prime renewal. Your sister’s had that same birthday this whole time.
Here’s what we did to reduce the stress of these semi-regular larger purchases. We’d love to hear how you handle them, too!
How to Spread Out Your Spending
1. Make yourself a cup of tea, gather your bank and credit card statements for the past year, find two different colored highlighters or colored pencils and a notebook, and get comfortable. (Hint: relaxing music.) This could take some time. (Want to use our template below? Here you go!)
2. Decide on an amount of money large enough to throw off your spending plan for the month. It doesn’t have to be large enough to wreck it completely, just enough to annoy you.
3. Go through your bank and credit card statements for the past year and write down everything you spent more than that amount of money on, outside of your regularly scheduled monthly budget. Divide your list by month. This is where it’s going to take some time, and maybe some emotional energy. Keep at it!
4. Congratulate yourself on making it through the past year. You did what you had to do to take care of yourself and your loved ones despite these unexpected expenses trying to throw you off!
5. Go through the list and highlight anything truly unexpected. These are the things you don’t expect to pay for again in the coming year.
6. The remaining expenses are, in all likelihood, going to show up again in the coming year! Is it a lot of them? More or less than you expected? Can you move any of them to your monthly budget?
7. With a different color, highlight the ones that must occur in the month you have them in. Leave them blank if you could conceivably move them to another month.
8. Make a new, blank list of months, this time for the coming year. Transfer the newly highlighted expenses to next year’s calendar.
9. Are there some months that have more expenses than others? Move the remaining, flexible expenses to next year’s calendar, trying to spread them out so you don’t have one month with nothing and another month with hundreds of dollars of extra expenses.
10. Put your calendar with your normal monthly budget so you can plan for these expenses as you go. And make an appointment with yourself for a year from now so you can do this again.
Inevitably, something will come up next year, too. (Hello urgent care bills from the time I stepped on a nail in the street! And congratulations to whatever tire I saved from that nail.) When it does, you’ll be ready. Because it won’t be the same month that you have six other extra-budget expenses!
