Lesson 2 - Irregular/Seasonal Expenses

Objective: Estimate irregular/seasonal and create a monthly expenses amount for them.

Thus far in the program, you’ve tracked expenses, distinguished between fixed and flexible expenses, and implemented strategies to reduce some of those expenses – so what’s left before creating a spending plan? Don’t forget about those seasonal or irregular expenses! Seasonal/irregular expenses are those spending items that don’t happen every month. If you have children, what do typically have to buy in August? School supplies! What about November and December? Christmas presents and other holiday expenses. Property taxes, and many insurance plans, such as car insurance, that are sometimes done annually or semi-annually instead of monthly, would also be considered irregular spending. To help keep your monthly spending plan from fluctuating too much month to month, it’s recommended that you add up all of these irregular expenses over the course of the year, and then divide by twelve. For every month that you don’t have an irregular expense, this is the amount you should save, specifically for those expenses. After doing this for 12 months, you should have a pretty steady spending plan month in and month out! 

Example

Here is an example of some seasonal expenses over the course of the year:

School supplies – $200 per year

Car Insurance - $600 twice a year - $1200 a year

Holiday Expenses (Thanksgiving, Christmas presents, Christmas decorations) - $400

Total - $1800 for the year

$1800/12 months = irregular expense of $150 per month

This example individual should put an expense item on their spending plan for $150 for irregular expenses to be saved every month they do not have one of these irregular expenses.

Assignment

Estimate irregular/season expenses for the year, divide by twelve, and create a monthly expense amount to be saved every month.

Complete this assignment in Microsoft Word - if you do not have access to Microsoft Word, contact your course facilitator. Once you've completed the assignment, email the Word document with the assignment to your course facilitator, who will provide feedback via email.