Spreading out irregular expenses throughout the year.
Today we had a load of wood delivered. Next week we will have yet another one delivered followed by yet two more in May/June. We heat our house (or least try to!) primarily with wood. It is far cheaper than using our propane furnace, plus we love the even heat from the wood stove. Once the heating season is over, we will have our chimney cleaned and inspected. Just a couple of weeks ago, we had our propane tanks topped off as we still qualified for an introductory rate. Why are we doing all these things now with Spring just around the corner? We are trying to rearrange our financial seasons!
When it comes to our finances, Fall and Winter have always (and I do mean always!) been our most difficult time. Between our aforementioned heating needs, life and auto insurance premiums, Christmas, taxes, auto tags, snowplowing, etc, this is the time of year we get hit with a lot more irregular expenses. You would think that after this many years of marriage we would have learned to be better prepared. The next time around we finally will be! No, we didn’t win the lotto (don’t play) or magically find some extra money to suddenly cash flow these things. What we do have is an extra check with it being a three payday month. Much like our other checks, we are delegating where this money will go.
I’m sure to others the thing to do would be to have a sinking fund to cover theses expenses when they come up. Yes, we are doing that now as well. Using this extra check to get our future heating expenses out of the way simply made sense. With being relatively new to even having a sinking fund for these expenses, this now gives us an entire 12 months to save for the following year. Otherwise we’d be paying for the wood, chimney cleaning/inspection and propane in just another six months. Being on a tight budget, this boost helps ease how much we need to save for next Fall and Winter. Come the Spring of 2018, the funds will have already been saved without having to use the extra check. Getting this big expense out of the way, plus now having an established sinking fund, gives us peace of mind…and that is priceless!
Have you ever rearranged your financial seasons? More importantly, do you have an established sinking fund for your irregular expenses? If not, there is no better time than the present to start one! Irregular expenses will come around and there is no better feeling than knowing you have the money to pay the bill when it does come!
What a great idea – and one I should think about implementing when our three paycheck month rolls around. We ALWAYS have a hard January through March for myriad reasons – some that *should* be anticipated (ie. oldest daughter’s bday and sewer taxes). Tine to start saving/padding this known hard time rather than just planning out Christmas. =) We do tend to top off our oil tank at the end of the heating season to begin the next one with a close to full tank. We have used the absolute last of our two chords of wood (bought in fall 2015) so I need to probably do that come early summer rather than waiting until the fall. Thanks for helping me put on my “thinking cap”! =)
TrayceeBee recently posted…Day Book March 16, 2017 and Gas & Garbage
You’re very welcome! Plus getting your wood a little earlier will allow it to season longer. No more dreading the “hard time of year” because you’ll be better prepared!
I keep a list of what month each irregular bill is due for the whole year. That way when extra money(xtra paycheck, refund of some kind, bonus, etc.) comes in I can look ahead to see if we need to reserve some of those funds to cover an upcoming irregular bill. Right now, the only irregular heavy bill month is August but otherwise we’ve got these IBs spread out fairly evenly and can mostly cash flow them.
Sluggy recently posted…Happenings Lately at Chez Sluggy
I bet it feels good to cash flow those irregular bills! That is our goal with setting up our sinking fund(s).
That’s a good idea. I should be planning ahead for when we have to fill up our propane tank (having one of these is new to us). It was filled up last August (just before we bought). The propane guy was at our neighbors the other day and looked at our balance for us. Said we should be fine to make it until summer, when the rates go way down. When that comes I’ll have that big bill to pay, so I should start saving for it now.
OneFamily recently posted…That is odd
Also ask your propane company for a new customer rate. We were given a locked-in rate of 99 cents/gallon until the end of March. Believe me, we took advantage of it. These tanks aren’t cheap to fill.
I need to work better at this BUT when we moved back to CO from TX I renewed ALL vehicle tags at the same time so i (1) don’t have to wonder all year if something is due and (2) I have 12 months to save enough for the next year. Fortunately when I needed a new car this year is happened to fall at the same time as the rest of the registrations were due. Having 2 vehicles, 2 motorcycles and trailer this really helps.
Good that you have a way to track them all (keeping them all due at the same time of year). I can be so hard to remember these irregular expenses.