Planning ahead for Periodic Expenses
It can be a little overwhelming to try to figure out how much money you should set aside for periodic expenses, such as auto or home maintenance. While working with Mvelopes Members I generally try to walk them through the standard expenses that everyone can expect. Let’s use Auto Maintenance as an example.
First we have oil changes. On average you will typically need 4 oil changes per year, depending on your mileage. The cost of an oil change can vary depending on your city/state, type of car, or you’re your mechanic. Let’s use a rough estimate of about $50 per oil change. That would mean $200 per year, or $16.66 per month.
Second we have miscellaneous things like windshield washer blades, windshield washer fluid, light bulbs, other fluids, etc. Let’s assume $50 a year for these types of expenses. You could also look at this as $4.16 per month.
Tires would be another expense that we can plan ahead for. People replace their tires every 3 to 5 years typically. Tires can vary a great deal in price, but for this example let’s use a rough estimate of $125 per tire. Let’s assume we replaced our tires 2 years ago and we want to get new tires in about 2 years. Four tires would cost $500 and if we had 2 years to set that money aside, we would want to set aside$20.83 per month, for 24 months.
With just these minimum typical expenses, we have easily come up with a budget of $41.65 per month for Auto Expenses, or $500 per year for the next 2 years.
You would of course also want to take into account the age of your car, and the mileage. For example, there are manufacturer recommendations for certain services to be performed at 50,000 miles, 100,000 miles, etc. Your mechanic should be able to provide you with a list of those services and their cost.
The same type of exercise can be done for home maintenance, holiday expenses, etc. As you use Mvelopes you will become more aware of where exactly your money is going and you will find it easier to estimate these types of expenses.
-Jennifer Streiff, Money for Life Coach
photo courtesy of blog.omy.sg