Uneven Cash Flow Calculator
Irregular payments are budget busters. The problem is you get paid regularly but the dentist, car tires, insurance, and doctor bills all arrive at irregular times. Worse yet, these bills are often large and must be paid over many months.
Use this irregular payment budget calculator to add up all your irregular bills that occur reliably during the year, convert them into monthly equivalents, then figure the amount you need to budget each month to pay those bills. It can save you a lot of frustration.
Convert Irregular Payments To A Monthly Amount
Budgeting can work well with regular expenses since we already have an idea of how much we pay every month.
But how do we allocate funds to expenses that are unpredictable?
Unpredictable or irregular expenses are those bills that you pay only once a quarter, twice a year, once a year, or on a as-needed basis. Those are mostly the expenses that we often remember when they are due. Basically, any expense that does not fit into a set billing pattern would fall into this category.
Thankfully, the Irregular Payments Budget Calculator will add up all your irregular bills that occur reliably during the year, convert them into monthly equivalents, then figure the amount you need to budget each month to pay those bills.
In practice, one of the reasons why budget plans fail is because the budgeting or the cash flow planning process often doesn’t include the irregular expenditures. The end result is that in many years, the money that was supposed to be left over to save after planned expenses just isn’t there after all.
To deal with these kinds of expenses you should have an effective plan in place. Set aside money for the irregular expenses to avoid cash flow issues. If it’s an expense you know is coming then you can break the amount into monthly chunks and set that amount aside to pay when the bill comes. Irregular expenses may include bills to be paid for:
- Car/Homeowners/Health Insurances
- Local Property Tax
- Annual Licenses
- Quarterly Tuitions
- Annual Subscriptions
- Professional Dues
- Holiday Expenses
- Vacation Costs
- Annual Retirement Contributions
- Uniforms or Clothes
The Irregular Payments Budget Calculator can help you convert the amount you pay for these bills into monthly equivalents. Start with listing all your irregular bills and how often do they occur. To get the average monthly payment, just input the amount you need to pay and how often you pay this in a year.
How To Handle Irregular Payments
Most people they use the sinking fund method. Sinking funds are basically just named savings accounts. They start saving every month to prepare for the irregular expenses. If you think you’ll be tempted to dip into the account for other things, consider opening an account at another bank, so it’ll be harder to get at. Some would set an automatic transfer in their bank savings account monthly. If you do this faithfully you will never have to worry about paying that bill when it arrives.
Another method used for handling irregular expenses is boosting the budget for regular expenses. This might sound odd, but recording predictable expenses as slightly higher than what you normally pay would increase your budget allowance while giving more cash for unpredictable things. If you are budgeting for contingencies and you normally budget $90 monthly for it, increase it to $100. This way you can increase your available funds for irregular payments.
Some people pay their irregular expenses out of their regular budget by adjusting their regular expenses. Most people who practice this method often have trouble saving money every month. Their budget for savings would often end up being paid to the irregular expenses.
One of the mistakes people make when trying to get their finances under control is not having an emergency fund. The problem is that if you don’t have money set aside for those unavoidable bills, you inevitably end up adding to your credit card balance or taking a personal loan to cover the difference. Obviously, this is not the most ideal way to handle irregular expenses. Unexpected expenses are the common culprits that add to our debt.
By preparing for irregular expenses ahead of time, you get a more vivid idea of when and how you should be saving money. Prevent irregular expenses from surprising you. Bills change over time, so review your irregular expenses once a year, and make any necessary changes to your totals.
Another great benefit to saving money monthly for irregular expenses is that it doesn’t require much effort. Saving little by little is a lot easier than trying to come up with a lot of money in a short period of time.
Plan for irregular expenses now, so you won’t be hurt by them later. Try out the Irregular Payments Budget Calculator today!
Irregular Payments Budget Calculator Terms & Definitions
- Irregular Payment – A payment that doesn’t happen on a monthly basis.
- Budget – An estimate of income and expenditure for a set period of time.
- Payment Description – These are your billings that are infrequent, but easy to predict. An example is your life insurance bill that you pay annually or semi-annually.
- Number of Payments Per Year – This is how often you pay your irregular bill in a year.
- Amount of Each Payment – The amount you pay for your irregular expense.
- Monthly Total To Budget For Irregular Payments – This is the amount you need to save or allocate monthly for your irregular payments to ensure you’ll be able to pay these bills.
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