Today is your day.
You’re off to Great Places!
You’re off and away!
– Dr. Seuss
The official launch date of CentsAbility is today, January 10 2012. But, enough about us. (Although I do want to thank all of our supporters, associates and cheerleaders).
Once a year, Albertans receive notice that their vehicle is up for renewal. Since renewal date is based on last name, many families will have two (or more!) renewals due at the same time. While this is likely not a family’s largest once-a-year cost, it nonetheless is a good reminder that having money set aside for annual expenses is imperative to good money management.
Imagine all the other potential annual costs we have that we may not be immediately aware of: Taxes, Insurance, Vacations, Emergencies, School fees, Holiday expenses, Home & Yard maintenance, RESP/RRSP contributions, Activity fees, Appliances…the list of items that fall outside of our regular monthly budgets are many. But more importantly, they are real. These once in a while costs don’t come with a matching boost in income.
So, how to handle them? Here are a few suggestions:
1. First, add up as best as possible what your annual expenses are. Divide by 12. Be sure to incorporate this number into your monthly budget as a separate item.
2. If you receive additional income once in a while (extra-large commission, bonuses, etc), save this money in a separate account so that it is ready to pay your annual expenses. It feels so good to pay a large bill without having to use a credit card, line of credit or otherwise throw your budget into disarray.
3. Set aside the monthly amount from #1 into one or more separate accounts. Most people will want to separate their emergency fund from anything else so that it doesn’t ‘accidently’ get used for a vacation. But you may also want to separate out other expenses so that in your mind, you know what is what. You can do this using separate bank accounts, or keep tabs on your own.
So, cheers to New Years, new starts and new money management skills!