Most people have a handle on how much they usually spend on regular costs.

These costs are expected. It doesn’t feel like they are to blame for knocking our finances off-balance (although they play their part).

What derails our plans are large, unexpected expenses. Medical bills, car repairs, a friend’s wedding… everything was ok until they came along, and then we had to wipe out our holiday savings, or reach for the credit card.

One of the best small steps you can take in fixing your finances is to figure out what ‘unexpected’ expenses might happen to you this year, and when. So they are no longer unexpected, but planned for.

Don’t be put off by the fact that you can’t always be precise about the cost or the timing. You can ballpark things like how much a car repair might cost, and when it might happen. Even though you won’t be 100% accurate, you will be infinitely better off than by not planning for it at all.

It can be helpful to get a print out from your bank account or credit card of all expenses in the last 12 months that were over a specified amount.

And then add in the things that are specific to this year. Think about things like:

• Upcoming medical expenses e.g. dentists, glasses, hearing aids, surgery
• Are any special celebrations coming up this year? Family or friends’ birthdays or weddings or special anniversaries? Cultural or religious festivals or ceremonies? Record the month and all the anticipated costs – travel, accommodation, new clothes, gifts, food.
• Scheduled maintenance on things you own, especially cars and houses.
• Repairs on things you own, especially cars and houses. This one you will have to guesstimate both the amount and the timing – just come up with a number that feels like it would be enough to cover the bill.
• Sports equipment that needs repairing or replacing; any special training camps
• Tax bills
• Insurance premiums
• Bills from lawyers, accountants, medical specialists
• Bills you pay for your children – schooling costs, extra-curricular activities, sports or cultural trips, school camp, medical expenses
• Bills you pay for your pets – especially vet bills
• Yearly club subscriptions or gym memberships
• Any travel plans you are already committed to, or would like to commit to
• Any concerts, festivals or sporting events you would like to go to

MoneyGrit software has a worksheet for these costs (The Periodic Expenses worksheet) that automatically puts them into your monthly and annual spending plans. Or you could use a spreadsheet or just a notebook if that’s what works for you.

What you need is an idea of how much you could reasonably expect to spend on these types of expenses over the next 12 months, and a way to see what the really expensive months are.

Having this written down can be daunting. If looking at the cost of everything you have coming up stresses you out, take a deep breath. Lean on your support partner. Remind yourself that you are looking at a prediction of the future - it hasn’t happened yet.

There’s still time to do something about it.

Next week I’ll show you what to do.

Photo by Fausto Gomez