One thing I’m struggling with is making sure that my budget accounts for annual (or other non-monthly) expenses. For example, let’s say I have a magazine subscription that costs $50 and I pay it every August. The easy answer is “just put $50” in August, but that becomes more complicated when:
I have lots of these things
some expenses are in categories that also have a monthly discretionary amount
I’ve thought of creating a new sheet where I could list all of these expenses and then somehow have a 2-item budget for every month where 1 item is coming from the annual sheet and the other is my discretionary. But I’m curious what other folks do with this kind of thing?
Hi @roleary,
I’m sure you are not the only person struggling with this.
I don’t think there is a right way or a wrong way to do it. It’s whatever works for your situation. Does the extra work a workflow might require provide the extra benefits you need to better review your financial situation.
For me, this is one reason why I prefer to enter monthly values in a Yearly budget rather than just a Monthly budget. In many cases these annual expenses are pretty large (insurance, property tax, etc) so its worth the effort to create categories and put them in the month they are due. This way, these large annual expenses help me understand why one month’s expenses might be much higher than another even though I think I spent less.
For expenses categories which include both a monthly amount and a yearly amount, putting in a higher budget amount for the month when there is the one-time annual payment works fine.
The category can include both the monthly and one-time amounts in the budget that way.
If the one-time amounts are very small and mixed in a category that has a variable amount anyway, I usually don’t worry about it.
I just created a new sheet called “funds.” For each “savings fund” (for annual or otherwise non-monthly expenses, I have two columns. One is static, and I manually change it at the end of each month to reflect the current total in the fund. The second is dynamic, and is linked to the “available balance” on my monthly budget. So I create a category and budget each month, and then whatever isn’t spent, gets pulled into the funds sheet. The formula is simply =(click on static column amount) + (click on available balance on budget worksheet). So it might look like this: =C15+‘Monthly Budget’!H70
Then when I need to see how much I have for a particular need or planned expense, I can look on that sheet. I also notate what bank account each fund is in, and link the account balance to the top of the dynamic column, so that I can see how much of the funds in the account isn’t tied up in planned future expenses. I budget to a zero balance on my monthly budget, so this helps me see that my cashflow has a purpose.
The only thing is that I think the balances on the account sheet change order when they get updated, so I have to go in and re-link them to the correct box every now and again when I’m checking the sheet for totals. And if I add categories, the boxes linked to the dynamic categories column move too, so I have to go and re-do the formula when that happens. I’m sure there’s a way to do it that will fix that issue, but I am a super, super novice and I don’t know what it is.
Does that make sense really at all? I can probably show a screenshot of what I mean if you want to see it.
Hi, trying to get some answers and this thread looks like the right place. I tried adding the month a particluar expense was due (it’s a quarterly expense) in the categories sheet but it wants to replicated the same expense over and over again for each month. When I try putting a zero in the month that doesnt require a payment the whole amount for the quarterly payments shows up. Any suggestions?
I should have also said, sorry I’m a new to this community, that the full quarterly payment shows up in my monthly budget. So if I pay $100 dollars in jan, april, july, oct and enter $100 into each of those months in the categories section and put zeros in all the rest of the months the $100 still shows up in my budgets for each month even in a month where I entered a zero. I’d like the category spend by month to match the monthly budget.
Suggestion - set up a “savings or money market” account in the same bank where your checking account/bil paying account is. Let’s say your annual insurance bill is $1200. Set up a $100/month “expense” for your Insurance Category. Transfer/Spend $100 each month from your checking to Savings/Money Market account (some banks let you set an auto transfer on a set date each month). That way it looks like you “spent” $100 each month. When your bill comes due Transfer the money into your checking account and allocate to your Insurance Category (don’t do the transfer out of the $100 on the month the bill is due). Pay the bill and it looks like you spend $100 for the month the bill was due because you only transferred in $1100 the month the bill was due. You could set this up for every “non monthly” bill (keep in mind you could do one transfer to Savings/MM each month that covers multiple non monthly bills and then split the “spend” across Categories). Yes a bit of a hassle and perhaps messes up some reporting depending on how you like to see things but it’s a way to at least allocate your spending on a per month basis and have the cash available when you need it. Plus you get a smidge more interest on your free cash flow (yeah not worth much now a days for sure)!
Sorry for the delayed reply here, maybe you already figured it out, but the Categories sheet in the Foundation template uses simple formulas to cascade the budget values from left to right. So if you need $100 in Jan, Apr, Jul, and Oct you can type 100 into those months and then type 0 into Feb, May, Aug, Nov and the cascading will work to update all the other months to $0 when you don’t need the $100 budget.
I am a huge proponent of the rollover budget in Tiller. I think it makes these situations much easier. I just did this yesterday. I bought a new maintenance plan for my furnace that costs $16.95/month but renews annually. I created a new Category (HVAC Maintenance) in my “Household” Group. I set the budget at $16.95 and it’s done. Set the rollover to that same Category. I have a “Free Savings” Category that is where I balance things. So I deducted $16.95 from that budget and I was good. I do this for all sorts of periodic things:
Landscaping mulch (annually)
Driveway seal (annually)
Septic pumping (annually)
School Tuition (annually)
Car insurance (semi-annually)
Trash service (quarterly)
Tax prep (annually)
Professional license fees (annually)
Some things I save for are a little more difficult to budget like vacations. I estimate what I’m going to need and divide that by the number of months until I need the money. If I’m a little short, I take it out of my “Free Savings” Category.
So much of @brewer.05’s post for me! I went back about a year in my credit cards, etc and found all my annual subscriptions and did this - but at some point i created a line item for ‘subscriptions’ that covers magazines, renewal fees, etc that are small to keep the budget more tidy. So important things that i want to make sure i see status i’ll line item (property taxes, etc etc) and the other stuff i loop together. Just have to remember to add / update as new things come in.
I am thinking of this problem a slightly different way because good chunk of our income is lumpy (bonuses, equity vests, etc.)
I’m planning to create a monthly budget view for our regular expenses and salary then an annual budget view for extraordinary income and expenses: bonuses/vests on the income side as well as vacations/home improvements on the expenses side. Has anyone done anything like this? I’m thinking of modifying the categories template to include another tag “Budget Period” or maybe two flag columns of “Annual” and “Monthly”.
I’d recommend looking into the Savings Budget sheet as well as the Savings Goal Tracker sheet. These are both community-built solutions that you can add via the Labs add-on.
@gknatld THANK YOU! I came here trying to find a suggestion on how to handle a slightly different question and I think your idea works great for me. I have SEVERAL quarterly/ semi-annual/ annual expenses. I keep a list of when I pay the bills and getting them paid on time is not a problem. However, I’ve been trying to figure out a way to put, (for example and easy math), say $25/month literally into savings for Expense A, because it’s about $75 each quarter. Then I’ll have Expense B that I want to put $50/month into savings to pay semi-annually for $300. I literally want to move money from checking to savings so when the bill is literally due, I’ll have money set aside. (Duh, right?) But I’ve been trying to figure out how to categorize that. I think your suggestion is perfect. I can move $75 to savings and categorize it each month to the appropriate expense item, but when it comes time to pay it, I’ll just categorize the ACTUAL paid amount to a “transfer” type category or “pre-paid” category that’s hidden from my tracking. It seems so simple, but I have been brainstorming for a while on how to handle this and I was just drawing a blank! Lol Thank you!
Can you please give me a bit more detail about how to close out an annual savings goal, eg property taxes? I’d like to start fresh every year after I make my payment.
@wendyraelynn I’m not totally sure I understand what you mean.
Generally, I think when the year starts over the budget starts over. Are you using a specific sheet or solution where you’re tracking savings or just the Montthly/Yearly budget that are default in the Foundation Template.
Thanks for responding @heather I’m using the savings goal and debt tracking sheet to make sure I have saved every month for the property taxes that are due in November. When Nov. comes around and I pay my taxes, how do I start over for the following year?
Spending Money from Savings Goal
Just assign any expense transactions to the savings goal category to spend down the savings. For example, if you’ve been saving in a category called “Summer Vacation”, just apply that category to the airline tickets you purchased.
Yes that makes sense. I just needed someone to tell me to just change the deadline date. I was thinking I would need a new line item, but really I want to keep the same one as it’s linked to that category.