Saturday, 31 December 2011

Setting Aside Money for Annual Expenses

Most household costs can be easily worked into a budget. Monthly rent and bills, fuel costs, mobile phone contract, food costs, etc. If I have £50 left over after all that, it's mine to spend, right? Wrong!!

Christmas is a fantastic example of an annual event which can “come from nowhere” and bust your budget! It happens every year, yet this year has been the first where I've actually set aside a little from every pay packet to spread the cost. I've just been going through my budget and thinking of how much I need to budget weekly and monthly to be able to afford the annual costs of living!

Car tax – My car tax is due for renewal in February, when I need to pay either £215 for a year or £118 for 6 months. (Makes me miss my little Micra's 1 litre engine and £130 for a year's tax!!)
MOT – The MOT safety checks for Jools the Peugeot will cost approximately £50 at my local garage. Since he'll be 12 years old by September when it's due, I'm guessing it'll cost a little in repairs too. I've budgeted an extra £50, but if he costs more than that then it's a matter for my Emergency Fund!
Car insurance renewal – Again, due in September. I'll be a year older and hopefully with a year's No Claims Discount, HOWEVER the EU has ruled that women's car insurance prices have to be equal to men (despite us being ten times less likely to have a serious crash...) from December next year, so my insurance is likely to increase, rather than decrease, next year. (Don't get me started on how somehow sexism is not allowed in car insurance yet ageism is!!) Worst case scenario is about £70 a month with a £150 deposit, so I'm budgeting £220 for the initial outlay.
Gifts – Christmas cost me about £130 this year for my entire family, which is at least £300 less than normal! (We used to go a bit crazy at Christmas!) For this year, I am budgeting £300 for all gifts, which will include both birthdays and Christmas!
Dental checkups – Dentists charge anything from £15-£40 just to look at your teeth, and you're supposed to go every six months. I know I need some work doing too, so I have a separate fund for this.

Things you may also need to consider:
Television License – If it were up to me, we wouldn't have a television at home. When I'm at Uni again later in the year, I will not get one. If you do have one, don't forget to budget £145.50 for this year.
Holidays – If you want to go away over the summer, spread the cost over the winter months too!
Subscriptions – Do you have any annual subscriptions to the gym, magazines, clubs etc.?
Insurance – Do you have to pay any life, home or disability insurance premiums annually?

I need to spread the cost of approximately £900 over the course of the year. £17 a week sounds a lot better than squeezing £400 into my normal budget in September!!

Have you got a section in your budget for occasional expenses? How much do you need to save?


lizzie said...

I am going to go on hypermileing like you do but also read my meters every week and try and trim my utilities a bit. I have enough food left over from this month to feed us right through January I think.
I am going to start planning next Christmas a bit in advance - you did great on your budget.

keshling said...

Well done on bringing the cost of Christmas down. I did really well, especially with the food budget...we were all working over the holidays and were almost too tired to eat when we got home. Certainly saves money!
Good luck in 2012 and keep up the good work you've started.

K xx

Jayne said...

You've inspired me, I'm spending a lot less on my weekly food bill, thanks to you! Happy New Year.

saving for travel said...

We have a contingency but at £50 it's too small really.

A good, thought provoking post.


Sft x