Our debt counselors know that unknown expenses come around all the time. They wallop us with their unpredictable amounts that we have to spend and their bad timing and their baggy pants and their loud music (dang punk expenses). But there are many “periodic” expenses in life that we are well aware of. We just forget about them as the year barrels through. Or we know they are coming and, like the grasshopper and the ants, we don’t plan ahead for them even though we know they’re inevitably coming.
But you have the power RIGHT NOW to change how difficult it is to plan for one expense.
To avoid credit card debt, save for periodic expenses ahead of time.
BACK TO SCHOOL SHOPPING
Because you just did it or you’re doing it right now!
Sure, when thinking about New Year’s resolutions during the middle of December (and right between planning for Christmas/Chanukah dinner which happens around the same time this year) you’ll think: “I would like to control my money better.” But when will you really find or make the time to go back through your bank statements and credit card statements or receipts to determine exactly how much you spent on back to school shopping?
And that’s just ONE of many periodic expenses we come across.
First, a definition: A periodic expense is something that you have to spend money on every year, but it’s an expense that doesn’t happen regularly. A few more examples are paying taxes, doing your car emissions test, or twice a year dental cleanings if you don’t have dental insurance. Being unprepared for expenses can lead to credit card debt.
If you have kids or you’re going to school, you just made purchases for the new school year.
- How much did you spend on school supplies?
- How about new clothes or new uniforms?
- Did you have to buy a parking pass?
- How about club dues?
Now you can go back through your receipts or bank statements and list out the basic categories in which you spent money. List these out somewhere that you’ll remember. I suggest starting a folder on your desktop named something like: Budgeting is Awesome! (but you can choose something that makes you smile if that doesn’t do it for you). Then create a document for your “new school year expenses.” Also, I really like using excel for these lists because you can manipulate the data in different ways and add new years by using the tabs along the bottom.
Then, whenever you encounter an expense like this you can start a new tab in excel to keep track of how much you spend on these periodic expenses. Then in the future, you know to save ahead of time instead of being surprised by this periodic expense again.
I really like to do this for winter heating as well. When you know how much you spend this coming winter you’ll be able to plan for it even better for next year. Another option for not letting heating bills make your eyes cross is to ask your energy provider about “balanced billing.”
But that’s a nugget that will lead to another post down the road.
Happy new school year everybody! Do me a favor and bring your teacher an apple- it always made mine smile and a good teacher is something to be super grateful for.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.
