Two Decembers ago, I paid for Christmas, both vehicle registrations, a new starter for Mike's truck and a crown on his cracked molar all within about three weeks. Most of it went on a credit card, and it took us until the following summer to pay it off. You'd think someone who spent years processing loans at a bank would have seen that coming. I did see it coming, in a general way. I just never wrote it down.
So last January I sat at the kitchen table with a year of bank statements and a highlighter and made a list of every expense that doesn't show up every month. This past December was the first one in our marriage where nothing went on a card. I want to share the list, because making it was the whole trick.
Why these costs sneak up on you
Our monthly bills are easy. The mortgage, electric, gas, phones and groceries come every month, so we budget for them without thinking. The problem is everything else: things that happen once or twice a year, or every few years, and feel like emergencies even though they're completely predictable. Christmas comes every December. The car insurance bill comes every six months. Kids need shoes in August. None of that is a surprise, but it sure felt like one every time.
Our list
These are our real numbers from last year, rounded, with a few adjusted up after what I learned. Our property taxes and homeowners insurance are paid through the mortgage escrow, so they're not on here.
| Expense | Per year | Per month |
|---|---|---|
| Car insurance (two six-month payments) | $1,560 | $130 |
| Christmas gifts, food and hosting | $900 | $75 |
| Car maintenance and tires | $900 | $75 |
| Kids' clothes and shoes | $660 | $55 |
| Medical and dental copays, glasses | $600 | $50 |
| Home repairs and maintenance | $600 | $50 |
| Birthdays (ours plus nieces and nephews) | $480 | $40 |
| Summer activities (swim lessons, pool pass, camp) | $360 | $30 |
| School fees, supplies, pictures, field trips | $300 | $25 |
| Mike's work boots and tools | $300 | $25 |
| Vehicle registration, van and truck | $150 | $12.50 |
| Total | $6,810 | $567.50 |
When I added it up the first time, I just sat there for a minute. Almost $7,000 a year, on a single income, and we had been treating every one of those things like bad luck.
How we pay for it
Mike gets paid every two weeks, so we divide by 26 instead of 12. That comes to $262 per paycheck, which goes by automatic transfer into a separate savings account the same day the check lands. I nicknamed the account "Not a Surprise," and that's literally what the nickname says when I log in.
A few things that made it work for us:
- Separate account, same bank. Close enough to move money in a minute when a bill comes, far enough that I don't see it in our checking balance and think we're richer than we are.
- A simple tracking sheet. A notebook page with each category and its running balance. When the car insurance bill came in June, I paid it from the account and subtracted $780 from that line.
- Categories can borrow, with a note. If one category runs short, I can borrow from another, but I write down where it came from. It keeps me honest.
Starting was the hard part. You don't have a year of savings built up on day one. We made the first few months work by trimming groceries a little and putting a tax refund in, so the account had a cushion before the first big bill hit.
What the first year taught us
I underestimated the cars. I'd budgeted $900 for maintenance, and the van needed brakes and a new battery in the same season, so we ended up spending $1,050. The home repair line had money left over, so it covered the gap. The car line is going up to $1,000 this year.
Christmas was the big win. We had $900 set aside and spent $860. I shopped with cash in hand instead of a credit card and a hope, and honestly it made me more careful. I didn't buy the extra "little things" that always used to add up.
Some things are missing. This year I'm adding a line for the chest freezer or washer that will eventually die, and a small one for Ella's braces consultation, which is apparently coming whether we're ready or not.
I'm not a financial advisor, and your list will look nothing like ours. But if December keeps catching your family off guard, a year of bank statements and a highlighter is a pretty cheap place to start. Mine is back out on the table this week for the updated version.
