How often do you really plan ahead with your expenses? Do you take it month by month, or more like week by week? Do things like doctors appointments, car maintenance, and birthdays take you by surprise and put a cramp in your budget?
It’s not fun when things pop up that you actually should have anticipated, but it’s easy for things to fall through the cracks when we’re all so busy just trying to keep up with the day-to-day.
If you’re tired of being a little unprepared when it comes to your expenses, we have a few ways you can plan ahead with your budget that should help you out.
Method #1 – For the Detail-Oriented, Type A Planners
I’m writing this as a super detail-oriented, Type A planner myself. I love to have everything nailed down as much as possible, even though I accept that life definitely throws curveballs every once in a while. Being as prepared as you can be makes it easier to take, though.
When it comes to any major family event, such as an anniversary, birthday, graduation, or shower, try and fill in the blanks as soon as you can.
That means taking a pen and paper (or your phone) and inputting all the important dates at the beginning of the year. This technique comes from the women in my family (pretty sure my mom got it from my grandma) – they all mark down the dates in their calendars so they don’t forget.
If you actually look at a calendar on a regular basis, this could work for you. If you’re like me and just hang one for the moments you need to look at it while on the phone, then you’re better off using your phone.
The upside to using technology is that you can, of course, set the event to repeat on a yearly basis. You never have to remember again once you have it taken care of once.
For the events that “pop up” throughout the year, plug them into the calendar as soon as you get an invitation. If your smart phone has voice commands, it’s as easy as telling it to remind you!
Once you have all your dates in your calendar (digital or paper), it’s time to go to your budget.
I recommend planning your budget out for the entire year at the beginning. (Told you this was for Type A planners!) Get your basic expenses copied over to each month, and then look at months individually to see what expenses are going on.
If there’s a birthday in August, a baby shower in May, and a retirement party in October, make sure you plan for purchasing gifts those months.
Don’t forget the irregular expenses that can be anticipated, either. Plan for any healthcare visits (if you need to pay a copay), car maintenance, insurance premiums, annual membership fees, etc. Don’t be afraid to go all out – mark down anything you can remember.
Why is Planning Ahead Important?
Let’s take a break for a second and review how planning ahead can help.
Fall is the most expensive season for me because almost every single person in my family managed to be born between September and November. Then they went and made it worse as they all got married in the fall! (No idea how that happened.) Everything leads right into the holidays, and it can be really stressful if I don’t save up or buy presents ahead of time.
I’ll give you another example. I relocated back in April of last year, and all of our insurance was due that month. So was the registration and inspection for my car. Plus my car needed new tires.
Car registration + car inspection + car insurance premium for me + car insurance premium for my fiancé + rent insurance yearly premium + car maintenance = a (potentially) big and nasty mess. A mess that can be avoided when you know all these expenses are coming!
Method #2 – For the Somewhat Lazy Planner
Maybe color-coding your planner and budget with different expenses doesn’t appeal to you. I get it – not everyone enjoys that level of organization.
What you can do instead (and what I still recommend for Type A planners as well), is to start saving up monthly for all your irregular expenses.
This still requires a bit of planning because you need to think about all the expenses you need to budget for at the beginning of the year, add them up, and then divide by 12. But it gets easier as you continue with it.
Let’s say you have 10 birthdays to celebrate this year, 2 graduation parties, 3 baby showers, 1 wedding, and 4 anniversaries. For simplicity, let’s assume you budget $50 for each event, totaling $1,000.
Now take into account your other irregular expenses. Maybe you know your car is due for new brakes and an oil change in April. Or you need to get to the dentist for your yearly cleaning in November. Or that your annual membership to a certain organization is going to come due in July.
We’ll say that’s a total of $400. So we have a grant total of $1,400 in “irregular expenses” to budget for throughout the year. Divided by 12, that’s $116.66 per month you need to put away in an “irregular expense” savings fund just for these occasions.
Obviously this isn’t foolproof, but it’s much better than having nothing saved and possibly going into debt to afford one of these things. It’s also less overwhelming to save bit by bit than to see you’re going to be spending $1,000+ for various events!
What If I Have an Emergency Fund?
I personally don’t think expenses that you can actually anticipate, and know about, count as emergencies in the truest sense. But there are others who disagree, and that’s fine.
How you manage your money is up to you, but if you’ve been stressed out trying to plan for different expenses throughout the month, having a plan can help alleviate some of that stress.
You should leave your emergency fund savings for real emergencies, such as losing your job, your roof collapsing, or something medical-related.
When you know someone’s birthday happens on the same day every year, having to buy a present doesn’t really classify as an emergency. You’ll be thankful you didn’t touch your emergency fund when things do hit the fan.
Do you plan ahead with your budget, or do you wing it? Do you forget important dates often?