A budget is easiest when all you have to balance are the big things, like rent and utilities. These regular expenses arrive like clockwork to take most of your cash every month — but not all of it. Infrequent, irregular expenses take their fair share of your money, too. Thanks to their unusual schedule, these expenses can be easy to overlook until you have a bill in your hands. You can spare yourself this nasty surprise by budgeting for these irregular expenses in advance.
1. Emergencies
It can be hard to put a name to the unknown, but that won’t stop unexpected emergencies from coming your way. Unexpected issues will still arrive eventually, whether you want them or not.
How would you afford to call out for a technician to repair your leaking water heater or replace it outright? Usually, people use a credit card or line of credit to help in these situations.
If you don’t have one of these accounts yet, take the time to research your options. Once you find an option that fits your finances, you can submit your application for a line of credit online. If approved, you can draw against your limit to handle a water heater repair or any other unexpected expense.
While a line of credit works in a pinch, it isn’t the best way to deal with emergencies; an emergency fund is instead. Budget for these savings every month to grow this account so you can handle a repair without dipping into credit.
2. Credit Card and Line of Credit Bills
Once you start using a line of credit, you’ll start to receive billing statements for your purchases on these accounts. That means each billing statement is likely going to be different, as it reflects your usage for the month.
That much might be obvious, but these fluctuating balances can make it hard to budget. Unlike a personal loan, which has fixed payments due on a fixed schedule, your line of credit can go up or down each month.
Track these expenses carefully, so you aren’t surprise when you open your bill.
3. Annual Memberships
An annual membership can deliver a nasty shock. Unlike your monthly Netflix fee, these yearly expenses tend to be a large lump sum that can be hundreds (or even thousands) of dollars.
Don’t forget about these annual fees when making your budget:
- Account fees
- Club memberships
- Insurance
- Licence and registration dues
- Subscriptions
- Taxes
If these annual memberships make a dent in your budget, reach out to these companies to see if you can switch to a monthly payment schedule instead.
4. Regular Maintenance
It’s easy to forget your car needs maintenance when it gets you where you need to go every day. The same goes for your home. As long as it keeps you warm and safe, you can forget that your home needs regular upkeep.
Next thing you know, your check engine light is on, or your roof needs a patch. These repairs can end up on your line of credit if you don’t budget for them in advance.
Try to save 1% of your home’s purchasing price and set aside $50 a month for auto care.
5. The Miscellaneous
Everything that doesn’t fall neatly into a “bill” can trip you up. Watch out for miscellaneous spending on household items, toiletries, and snacks — they add up. Canadians spend roughly $310 on impulse shopping each month, while Americans spend $314. Think about saving that money or paying down your line of credit with it instead.
Keep these five expenses in mind when you update your budget. They’ll keep nasty surprise at bay.
