What are “irregular” expenses?
Irregular expenses are things you know will happen, but not every month. They’re not emergencies — but they can feel like one when you’re not prepared.
- Car maintenance and repairs
- Home maintenance and repairs
- Kids’ activities, lessons, and camps
- Annual or semi-annual insurance premiums
- Back-to-school costs
- Holidays, gifts, and birthdays
None of these are truly unexpected. The challenge is that they’re not monthly, so they don’t fit neatly into a traditional budget.
Why these expenses blow up your budget
When you only look at one month at a time, a $700 repair or $500 registration fee feels overwhelming. Families often respond by:
- Putting the cost on a credit card
- Dipping into the emergency fund for non-emergencies
- Feeling like budgeting “doesn’t work”
The fix isn’t more tracking — it’s treating these costs as small monthly amounts instead of big, random shocks.
The sinking fund approach
A sinking fund is simply money you set aside gradually for a specific future expense. You choose a yearly amount, divide it by 12, and save that amount each month.
When the expense arrives, the money is already there.
Step 1: Choose a few key categories
Start with 4–6 categories that tend to cause the most stress. For many families, this includes:
- Car maintenance
- Home maintenance
- Kids’ activities
- Gifts & holidays
- Annual insurance premiums
You don’t need to capture everything perfectly. You can refine this list once you’ve seen a full year play out.
Step 2: Pick rough yearly amounts
Choose simple, realistic annual targets — not perfect ones.
- Car maintenance: $800–$1,200 per year
- Home maintenance: ~1–2% of home value per year
- Kids’ activities: $600–$1,500 per child
- Gifts & holidays: $500–$1,000 per year
Step 3: Turn yearly goals into monthly amounts
Divide each yearly number by 12 to get a calm, predictable monthly amount.
- $1,200 per year → $100 per month
- $900 per year → $75 per month
- $600 per year → $50 per month
Now those “big” expenses are handled quietly in the background.
Step 4: Decide where to keep the money
You don’t need a complicated setup. Common approaches include:
- One savings account with simple tracking
- A few themed savings accounts
- Mentally earmarking part of existing savings
The best system is the one you’ll actually use.
How this fits with your emergency fund
Sinking funds protect your emergency fund. Emergencies are for the unexpected — job loss, illness, sudden failures.
Irregular expenses are expected. When you plan for them, your emergency fund stays intact.
What if money is already tight?
You don’t need to do everything at once. Even one or two sinking funds with small amounts can reduce stress noticeably.
Start small. Adjust later.
Want to see how irregular expenses fit into your monthly cash flow?
Explore this with a simple tool
Add sinking funds to your budget and see what’s realistic alongside your other priorities.
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