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Key Takeaways
- Create a list of all annual or irregular expenses (e.g., car registration, health costs, gifts, holidays, property taxes, and childcare).
- Divide the annual total of each category by 12 to turn unpredictable costs into consistent monthly savings goals.
- Planning ahead for these “True Expenses” creates financial stability and confidence.
If you’re building out a budget for the first time and you’re being your best responsible self, it’s important to understand the advantage of turning those big non-monthly expenses/variable expenses/True Expenses/what-ever-you-call-them into more manageable monthly chunks.
We’ve made a build-your-best budget list of non-monthly expenses, like medical bills, to help you transform those turbulent ups and downs into smooth sailing (and saving) instead.
How to Budget for Non-Monthly Expenses
There's nothing worse in the budgeting world than a rogue expense popping up and derailing your carefully calculated plan—and sometimes your bank account.
But really, non-monthly expenses aren't unexpected…it's more that they're just easy to forget. Incorporating them into your monthly budget helps keep your financial plan organized and plan ahead for those bills that pop up on your credit card statement on an irregular basis.
So first, grab a notebook and a pen, or a fresh Word document, and ask yourself, “What are irregular expenses?” This includes expected expenses not paid monthly. Don't forget annual expenses like that AAA membership or Amazon Prime subscription that's set to renew automatically!
Looking for more advice on how to budget for variable expenses?
Comprehensive list of non-monthly and variable expenses
Here’s a list of expenses that you may want to include as budget categories:
- Water bill
- Trash service
- Gas bill
- Transportation costs (gas, bus pass, tolls, parking)
- Auto maintenance (oil changes, new tires)
- Car registration and parking fees (license, tab renewal)
- Car insurance premiums
- Home repairs or maintenance (new roof, new hot water heater, new dryer)
- Renter/home insurance
- Health care and medical expenses (dental, eye care, therapy, health insurance deductible, etc.)
- Clothing
- Gifts (birthdays, anniversary, graduation, wedding, baby)
- Charitable giving (tithing, spontaneous donations, etc.)
- Computer/phone replacement
- Software subscriptions (Adobe, iCloud, Squarespace, gaming service, etc.)
- Entertainment subscriptions (Netflix, Hulu, Spotify, etc.)
- Vacation
- Gym membership/fitness
- Education
- Gaming
- Christmas
- Other Holidays (Fourth of July fireworks, Halloween candy, Mother’s Day brunch)
- Hosting
- Dates
- Beauty (hair cuts, makeup, nails, etc.)
- Property taxes (if they’re not rolled into a mortgage)
- Movies
- Phone bill
- Life insurance
- Warehouse membership (Costco, Sam’s club, Amazon Prime, etc.)
- Credit card fee (some cards have yearly costs)
- House decor
- Banking (interest owed or fees)
- Household goods
- Pet care
- Child care
- Kids’ Activities (piano lessons, summer camp, etc.)
- Kids’ Sports (travel soccer, lessons, cleats, etc.)
- School fees
- Braces
- Weddings (for yourself or others)
- Taxes
- Lawn care
- Professional licesnses
- Stuff I forgot to budget for (there’s always going to be something…)
Add These Irregular Expenses to Your Monthly Budget to Plan Ahead
Once you’ve created your list, make sure those non-monthly expense items are included in your plan.
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How to Calculate Monthly amounts for Annual or Irregular Costs
Then take the total cost of each irregular expense category divided by 12, and voila! Suddenly your non-monthly expenses are as steady and predictable as the rest of your monthly bills when it comes to budgeting.
Look at you—on your way to achieving your financial goals. You’ll probably be hosting a personal finance podcast before we know it.
Do you ever worry about money? You're not alone. Download YNAB, get good with money, and never worry about money again. Try YNAB for free for 34 days.
FAQs
Q: What should I do if I forget an expense?
A: Create a new category in your plan and adjust going forward. This is why many YNAB users keep a “Stuff I Forgot” category.
Q: Where should I keep these categories in YNAB?
A: Many YNABers group them under Non-Monthly. YNAB’s Non-Monthly Expense Template also makes it easy to import and organize categories automatically.
Q: Where should I keep the actual money?
A: It doesn't matter! Whether the money sits in your checking account or a separate savings account is largely an organizational preference. The important thing is that you're regularly setting money aside for these non-monthly expenses in your YNAB categories.
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