Hello! I am interested in how others have set up savings and budgeting for those periodic expenses. I’m looking at the following for mine:
- Quarterly pest control
- Auto emissions inspection
- Property taxes
- Auto taxes and registration
- Safety deposit box
- Domain registration renewal
- Tiller subscription renewal
My current plan is to use the community Savings Budget Sheet and move an appropriate amount each month into my short-term savings until such time as the payment is due. Have you done this? If so, how has it worked for you? Have you found something else that worked better? How is this impacted by using the Transfer category for moving items between accounts? How does that work with the budget sheet?
Thank you for your input and thoughts,
I am do exactly what you described. I have expenses like property taxes that I set aside funds for every month into a savings account. I use a separate Google sheet to keep track of the different buckets within my savings account.
I set property tax as an expense. My monthly transfers out to savings show up as an expense. When I actually pay my property taxes, I transfer a lump sum from my savings to checkings (a ‘negative’ expense) then pay the tax. The transfer and payment exactly offset one another.
Yes, this is very similar to what I do, though I only really do it for items that are a substantial expense that would otherwise throw off my budget in a significant way. For example, I have the Tiller subscription in a general category of subscriptions. I don’t set aside savings to cover that. I just absorb it in the month it hits. For my kid’s tuition, I set aside savings so that it’s there for the month when that’s due. Obviously, that threshold will vary for different people.
Is there a way to do this without having to transfer funds between bank accounts? I’m looking for a way to track how much I have set into these different savings buckets while keeping it all in my checking account.
You could using the Savings Budget sheet for this. In fact, this is exactly what it’s kind of designed for.
This isn’t a “Tiller” answer, but just wanted to share what I do.
For my big annual/semiannual expenses - property taxes, auto insurance, Christmas, Auto License/emissions - I set up separate HYS accounts and transfer the appropriate money each month.
For example, for Christmas we might budget for $1200 in total spending. This means I drop $100 per month into a specific “Christmas” HYS account. I do an “Escrow” titled account for property taxes and home insurance. I also use these accounts for non-regular, but probable, expenses like saving for when the beater teenager car gives up the ghost.
The HYS Account interest rate doesn’t beat inflation, but at least it’s something.
Exactly my process as well. Last year I used individual savings accounts at my bank because I hadn’t figured out the Savings Budget spreadsheet. Earned almost zero interest. My HYSA doesn’t allow me to create separate accounts so I took some time to figure out Savings Budget and now I use that for all my sinking funds in one balance. Savings Budget lets me see how it breaks out between my buckets. Excited to earn some interest on those amounts this year!
I think there is an accountability and realness to the account-transfer process you use, @colbyjashton and @derek.john.steele. That said, I prefer the simplicity of the Savings Budget as @dmetiller suggests.
I also use the Savings Budget to track this. At the start of the new year, I determine the amount I’ll need to budget monthly in each category by dividing by 12 the total amount spent per category during the previous year. By doing that, the funds I need to pay periodic expenses have accrued and are available when I need to pay them. I only transfer funds from my savings account into my checking account for a substantial unexpected expense. For example, we just signed a yearly HVAC maintenance contract, so I’m moving the funds to cover that expense from savings into checking so I can pay it in full this month. Next January, I’ll recalculate its category budget for 2025.
Thanks for sharing your workflow, @Rebecca1.