Once-a-year bills: how to be ready for them

Some months your budget holds up, and then the car insurance arrives. That is not poor management: it is an occasional expense that wasn’t on your radar. Finanzas para todos (Spain’s financial education programme) points out that a budget should include these costs that don’t come around every month.

What they usually are

• Car, home or motorbike insurance.
• Taxes and local charges.
• Vehicle servicing and roadworthiness tests.
• School fees or supplies.
• Gifts and celebrations.
• Holidays.
• Breakdowns and repairs at home.

Some are certain and some only likely. Put them all on a list: it is more useful even if a figure is off.

Step 1: find the amount and the date

Check last year’s statements or receipts. If you don’t have the exact figure, use an estimate, which is what Finanzas para todos advises when data is missing.

Step 2: divide by the months left

The idea is simple: the cost divided by the months left until it is due.

Expense	Amount	Months left	Set aside per month
Car insurance	€480	8	€60
School supplies	€150	10	€15
Christmas gifts	€200	12	€17

In these examples, setting aside about €92 a month avoids three big shocks.

Step 3: keep that money separate

If you leave it mixed with everything else, you will end up spending it. Use a separate account or envelope, or simply a named goal: “Car insurance”.

Step 4: review every quarter

Prices change. Every three months, go through the list, adjust the figures and add anything you forgot.

A handy bonus

In the month you pay the bill, nothing happens: the money is already there. And if one year it costs less, the surplus rolls into the next goal or your emergency fund.

In Pastizal you create a goal for each expense and it tells you how much to set aside each week to get there in time. You pay in, take out and see how much is left.