Irregular Payments Budget Calculator



 
 

Budget Calculator - Convert Irregular Payments To Monthly Periodic Payment

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.

Make Sure These Bills Are Included!
Payment
Description
# of Pmts
Per Year
Amt of
Each Pmt
Monthly
Amount
Monthly total to budget for irregular payments:

Predicting Irregular Expenses In Your Budget

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, once a year or on as needed basis. Those are mostly the expenses that we often remember when it is due. Basically, any expense that does not fit into a set billing pattern would fall into this category.

In practice, one of the reasons why budget plans fail it’s 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 a 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 includes 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
  • Buying new uniform or clothes

The irregular payments 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 in the irregular payment calculator the amount you need to pay and how often do you pay this in a year.

But how exactly do you handle irregular expenses?

For 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.

For some people, they simply 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 on their savings account. 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 for taking on debt.

Looking Forward

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. Plan for it now so you will not be hurt by it later.

Irregular Payments Definitions

  • 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 expenses.
  • Monthly Total To Budget Your Irregular Payment – This is the amount you need to save or allocate monthly for your irregular payments.

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