The lowdown:
- A few minutes of planning each month can help you feel more prepared
- Looking ahead helps you spot expenses before they sneak up on you
- Saving smaller amounts over time can make bigger costs easier to handle
- A regular check-in can also get families talking about what’s ahead
While most of us have a pretty good idea what’s coming out of our bank account this week, next month may not be as clear. Three or six months from now can be even more of a mystery. That’s often when expenses we expect and could have planned for catch us by surprise.
Think about things like property taxes, getting your car serviced, summer camps, or a ferry trip to visit family. Even something as big as the holiday season can creep up on you. It’s not that these things are a surprise—it’s just we haven’t thought about them for a while.
This is where a little planning around money matters comes in. We don’t mean creating a detailed budget or spending your Sunday afternoon updating a spreadsheet. We’re talking about taking just 15 or 20 minutes once a month to look at what’s coming. Here are a few tips on money planning for people who don’t like, or never find time for, money planning.
Quick Tip
It’s the once-in-a-while expenses that can sneak up on us. These might include property taxes, insurance, car repairs, school expenses, birthdays, holidays, vacations and home maintenance.
Start with the next month or two
Pick a day and have a quick look at your finances. First, check your account and credit card balances and quickly look through your recent spending. If any big, unexpected expenses jump out, take a closer look in case they weren’t budgeted for. Pay careful attention to anything that looks like a subscription in case it’s one you don’t need or use.
Next, look at the bills and payments coming up over the next month or two so you know how much roughly will be going to pay those.
You may already do those two things, but many people leave it there. Instead, we recommend looking a little further ahead during this mini-review to find things like:
- Home or car insurance coming up for renewal
- Servicing a car before a summer or winter road trip
- Registrations for kids’ activities for summer or new school year
- A birthday or other celebration coming up
You don’t have to figure out what to do there and then—the point is to know what’s coming and be prepared for it.
Finding out today that you’ll need an extra $600 in three months lets you plan for that so it doesn’t come as a surprise. For example, maybe you indulge in a little less takeout during those three months, or maybe you’re comfortable being able to absorb the extra cost.
With this in mind, it can also be a good time to check on your savings. Are you making progress on the things you’re putting money aside for? Has anything changed since last month? Is there something new you need to plan for?
Ask yourself these five questions
Your monthly check-in doesn’t need an agenda. These five questions are more than good enough:
- What do I need to pay for over the next month?
- Is there anything bigger coming up in the next few months?
- Is my spending about where I expected it to be?
- How are my saving goals going?
- Is there anything I could adjust now to make life easier later?
Some months you’ll be finished in 10 minutes. Other months, one of those questions might remind you about an $800 insurance bill or other upcoming expense you’d forgotten about (it’s amazing how quickly these regular annual expenses come around). That’s when this habit really starts paying off.
Quick Tip
Separate savings accounts, set up with automatic payday transfers, can be useful for bigger expenses.
Remember the expenses that don’t happen every month
Regular monthly bills are usually fairly easy to remember. It’s the once-in-a-while expenses that can sneak up on us. These might include property taxes, insurance, car repairs, school expenses, birthdays, holidays, vacations and home maintenance. Living on Vancouver Island or the Gulf Islands can bring its own seasonal costs, too. You might be budgeting for summer travel and ferry trips, getting the car ready for winter, or tackling work around the house before the winter weather.
It can help to make a rough list of the bigger expenses you expect over the next six or 12 months. You don’t need to know exactly what they’ll cost—an estimate gives you the heads-up you need. Then you can start breaking bigger costs into smaller ones. For example, if you expect a $800 expense eight months from now, putting aside $100 a month gets you there. Even just saving $50 still means you’ll have a big chunk waiting when the bill arrives.
Separate savings accounts, set up with automatic payday transfers, can be useful for bigger expenses. Again, don’t feel you need to create a complicated system. A note on your phone might be enough.
Make it a family affair
If you share finances with a partner or family, this can also be a good time for a quick conversation. Discuss things like:
- What’s happening with you next month?
- Is anything expensive coming up?
- What are you saving for and has anything changed?
Keep the conversation focused on what’s ahead rather than scrutinizing every purchase everyone made last month. You can involve kids, too. If you’re saving for a family vacation, for example, talking about the goal and some of the choices involved can help introduce the idea to them that bigger purchases take a bit more planning.
Keep it simple and repeatable
There’s always a danger that a simple financial habit like this turns into a chore, as if you don’t already have enough of those. Of course, you can download apps and set up a detailed spreadsheet—if you enjoy that sort of thing. If not, don’t sweat it. You can just do this:
- Set a monthly calendar reminder
- On the day, open your banking app
- Look at what you’ve spent and what’s coming
- Make a note of anything you need to deal with
- Get on with your day
If you miss a month, start again next month. While there will always be genuinely unexpected expenses, many things that can put pressure on a budget aren’t really surprises. We knew the car needed a service, insurance renewal time was coming up fast, and the holidays weren’t that far off—we just hadn’t thought about them lately.
A few minutes once a month won’t make those costs disappear (unfortunately!), but it can give you a little more time to prepare for them.