I don’t think I’m too far off in saying that person’s typical M.O. (mode of operating) when it comes to adulting and paying for bills to take them as they as come. Which means that there are going to be some pretty expensive months when a few of our annual bills come due. We know they are coming and even though we might not have the extra money on hand, we have learned to simply deal with it and hope it all works out in the end.

What Are Annual Bills?

Annual bills are expenses we have that occur once a year or possibly twice a year. Some examples of these would be, but aren’t limited to: 

  • Car Registration
  • Car Insurance
  • Annual Gym Maintenance Fee
  • Amazon Prime Membership
  • Christmas Gifts
  • Premium Credit Card Fee

And the list could probably go on and on. But the point is, some of those things are expensive and they are annoying to pay. For me, it’s the car registration and insurance. I hate paying those! Especially when they come due in the same month, it’s like a double whammy!

The way I have approached these types of expenses is I created a list in Excel, totaled them up, and divide by 12. This gave me a number of about $100 that I needed to save each month to cover my annual expenses as they come up. 

What Is The Best Way to Save For Annual Bills?

Taking that divided number my spreadsheet calculated, I then went to my bank and setup an automatic monthly transfer to go from my checking account to my savings account. The money leaving my checking account I categorize, in Mint, as a Bill & Utility because that’s what the money will eventually be used for. 

That savings account is not used for any other savings goals. It is basically an extension to my checking account. Money for retirement, emergency funds, savings goals or whatever go into different accounts so that nothing gets confused or leads me to believe that I have more money for something than I actually do.

Since most of these expenses don’t happen on the same month and are, for the most part, spaced out, I’m not worried about not draining my savings account at any given moment when it’s time to pay for these different things. 

This concept of saving money for annual bills each month seems to make sense for most people I suggest this too. It’s easy to figure out and implement even without having a budget in place yet. 

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