The Importance of Saving for Irregular Expenses

A person putting money into a piggy bank

Do you find that your irregular expenses, such as your vehicle insurance, annual vet visits for your pet, and gifts are doing a number on your budget? These expenses don’t need to wreck your budget or put you in debt; all it takes is a little bit of pre-planning throughout the year.

Make a list of your irregular expenses

The first thing you need to do is make a list of your irregular expenses throughout the year, including the month in which they will occur, and add a dollar value to each line item. This will give you a road map of when you will need to pay for each item on the list. Once you’ve finished the list, add them up and get the final total.

During this process, consider trying to find areas to save. Call up your service providers to see if you can get a deal on your services, or look into switching insurance providers to save on your home insurance.

Save the money

To be prepared for these irregular expenses, build them into your monthly budget by putting money into a savings account dedicated to your irregular expenses. You can set up an automatic transfer every pay cheque to simplify this process. Then, when an irregular expense comes around, you can pay for it by taking the money out of your savings account. This will allow you to prepare throughout the year for more expensive months, keeping you on budget and helping you stay out of debt.