I’ve already mentioned that a year isn’t just like having the same month repeated twelve times. Different events and unique occurrences can really impact your finances. The next step is to map out all these events in a 12-month overview. Here are a few things to start with:
Three-Check Month. In Step 3, we talked about the “three-check” phenomenon. Check your calendar and identify the two months in which this occurs each year. This means you’ll get two extra paychecks beyond what’s accounted for in a traditional month-by-month budget. This can significantly improve your financial outlook.
Expenses: Don’t forget to account for:
– Quarterly bills, like my water bill that comes every three months.
– Vacation costs
– Christmas spending
– Property taxes
– Back-to-school shopping
– Any other major one-time expenses coming up
Other Income: The year also brings some positive financial surprises:
– Income tax refunds
– Bonuses or profit sharing
– Dividend income
By looking at all these factors, you now have a clearer picture of your monthly spending throughout the year and how it affects your finances.
So, how did you do? Let’s discuss adjustments in the next section.
Go to the Next Chapter
Table of Contents:
– How to Budget – Introduction
– How to Budget – Step 1 – Where Does All My Money Go?
– How to Budget – Step 2 – Income Vs Expense
– How to Budget – Step 3 – Take It All The Way to 12 Months
– How to Budget – Step 4 – Add In Those Special Times
– How to Budget – Step 5 – Apply the Formula for Success
– How to Budget – Step 6 – Adding In Your Investment Goals
– How to Budget – Step 7 – Sticking to the Plan!
– How to Budget – Making It Easy with Mint
– How to Budget – Download My Excel Template
