Manage your annual surprise costs
June 20, 2009 by Jennifer Chait
Filed under saving money
Yearly surprise (or periodic) costs include things like health care and car repairs not covered by insurance, birthday gifts for all those parties your kid gets invited to, PT summer camp, and so on. When surprise costs pop up as surprise it can cause a crimp in your budget.
To ease the surprise factor of periodic costs, do a general estimate at the start of each year. For example, consider all the surprise costs of the previous year, then add them up and divide by 12. Once you’ve got a figure in mind, be sure to set that amount aside each and every month, just as if it was a real bill. Put the cash into a specific saving account, or just keep track of the amount in your normal account. When surprise costs pop up, you’ll have the money ready without having to move bills around, re-budget, or freak.
Actually, something to consider is doing the same with utilities. In some areas water, gas and electric companies will allow equal pay – basically they charge you the same price all year (monthly) based on your previous year’s bills. This means you pay more for electric in summer, when costs would normally be low, BUT in the winter you avoid crazy surprise $200 bills.
[image via stock.xchng]
