• About
  • My Favorite Blogging Tools
  • Archives
  • Advertise
  • Contact
  • Terms & Policies

Family Balance Sheet

where family, life, and finances meet

  • Home
  • How to Budget
  • Finances
    • Our Debt Freedom Plan
    • Christmas Savings Club
    • Debt Free Stories
    • Marriage and Money
    • Medi-Share
  • Grocery Budget
    • Saving Money on Groceries
    • Freezer Cooking
    • 31 Days to Slash Your Grocery Spending
  • Recipes
    • Freezer Cooking
    • Recipes – Appetizers & Snacks
    • Recipes – Beverages
    • Recipes – Breakfast & Brunch
    • Recipes – Desserts
    • Recipes – Grilling
    • Recipes – Main Dish
    • Recipes – Sides & Soups
    • Recipes – Slow Cooker
    • Cooking ‘How-To’ Series
  • Family
    • Frugal Holiday Fun
    • Frugal Family Activities
    • Travel Destinations
    • Camping
    • Budget Travel
    • Giving
  • Frugal Living
    • How We Frugal-ed
    • Saving Money on Groceries
    • Saving Money in your Home
    • Saving Money during the Holidays
    • Gardening
  • 31 Days to Find $1000

How to Budget (and Pay) for Yearly Bills + a FREE Speadsheet

This post may contain affiliate links. That means if you sign-up for services or make a purchase after clicking on a link below, I may earn a small commission at no extra cost to you.
Also, I am not a financial advisor. I'm a blogger who LOVES to share how I manage the finances for my household.

June 24, By Kristia 1 Comment

Not sure how to budget for your once-a-year bills? They can cause a panic, especially when just one bill is into the four figures, like our property taxes or auto insurance! But let me show you how to budget (and pay) for yearly bills with a strategy I’ve used for years.

I built a monthly system to set aside money specifically for our yearly bills and while I still dread writing those large checks, I am no longer paralyzed by it.

If you struggle to pay yearly bills on time, then keep reading!

How to Budget for Yearly Bills

Our Story:

April is always a very expensive month for us. Our home owner’s insurance, auto insurance, and local real-estate taxes (for our home and our business property) are due, and on top of that, there have been years where we also owed the Federal government. Typically in April, I write checks that total in the mid-four figures with everything combined.

Years ago, April sent me into a panic and a scramble to find the funds.

Today, I built a monthly system to set aside money specifically for our yearly bills and while I still dread April, I am no longer paralyzed by it.

It all started years ago when we refinanced our mortgage and were no longer required to send an escrow payment to the bank for real estate taxes and our home owner’s insurance.

With this change, I knew that I needed to be responsible for setting this money aside each month. I also realized there were many other bills that were due on a yearly and quarterly basis and I wanted to secure that money too, so I came up with my own system–a personal escrow account.

Action Steps to Budget and Pay for Yearly Bills:

1. Make a list of ALL your yearly, quarterly, and any other non-monthly expenses.

Our list includes:

  • home owner’s insurance – due yearly
  • auto insurance – due yearly
  • life insurance – due yearly
  • property & school taxes – due yearly
  • sewer/trash bill – due quarterly
  • I also include any quarterly or yearly registration fees, memberships dues, licenses, etc

2. Add up this list of bills and divide that total by 12. This new number will become a line item on your monthly budget.

3. Set aside that new number every month.

Every month going forward, transfer this money into a separate savings account that is connected to your checking account. When you are ready to pay a bill, transfer what is needed from this savings into the checking to pay the bill.

This savings account should strictly be your Personal Escrow Account and these funds are only to be used for the bills that you have identified in step #1. This is not an account to fund anything else–ever!

4. Update your list.

Every year when you get a new bill, remember to update your list and make any changes to the amount that you need to save each month.

Ok, I can hear you saying, “Kristia, you make it sound so easy!”

I get it. The first year could be tough, especially if you have never saved monthly for these bills. This system could take you up to a year to run smoothly, so if you start the fund in May and a bill is due in June, you might not have enough money in your fund yet.

Don’t let that deter you. This system works very well for us, but we have been doing it for several years. It will take some time.

To get started, you might need to supplement your account with additional money until you have accrued enough to pay your bills. For ideas to find those funds, read: 25 Ways to Find Money for Your Emergency Fund

A year might sound like a long time, but by transferring this money diligently each month, you are on your way to less stress and more calm when paying your bills.

Like a good spreadsheet?

My Personal Escrow excel Spreadsheet will help you determine how much money you need to set aside on a monthly basis and make your budgeting a little easier.

This spreadsheet is now included in my freebies when you subscribe to my weekly email newsletters. Subscribe HERE!

How do you pay for your quarterly and yearly expenses? Do you have a fund like this to pay those bills? Will you start one? Let us know in the comments.

More on Budgeting:

  • How to Start a Budget (and be successful at it!)
  • How to Build your Emergency Fund

Filed Under: How to Budget

Get a Free Family Balance Sheet Excel Spreadsheet download

Comments

  1. Rebecca Morgan says

    June 25, at 2:45 pm

    We use sinking funds at the bank for this. I have separate bank accounts for everything that we pay yearly/quarterly. It has helped so much since we started doing this!! Same basic principle just with separate bank accounts. It works better for me mentally to have the money stashed away separately!

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

CommentLuv badgeShow more posts

WELCOME!

SEARCH

Get a Free Family Balance Sheet Excel Spreadsheet download

recipes

Recent Posts

  • 8 Action Steps for a Frugal February!
  • Our 2023 Financial Goals
  • 3 Smart Steps to Pay Cash for Christmas
  • 30 Free but Thoughtful Christmas Gift Ideas
  • 10 Ideas to Find Cash for Christmas
Follow Kristia Ludwick's board Best of FamilyBalanceSheet.org on Pinterest.

Amazon Associates Disclosure

Kristia Ludwick is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

COPYRIGHT

I love it when you share! Please keep in mind that all images and text on this site are property of Family Balance Sheet. Feel free to use one or two photos provided that a link back to my original post is included. Please do not remove any watermarks, crop, or edit any of my images without first obtaining written permission from me. Please do not replicate or copy any content from Family Balance Sheet without written permission from me. All free printables & spreadsheets offered are for personal use only. Pinning is always welcome and appreciated! Thank you!

Disclaimer

FamilyBalanceSheet.org is for informational and entertainment purposes only. I am not a financial professional. I’m a girl who loves to talk and read about personal finance and how it relates to hard working families. If you feel you need financial advice, please seek out a competent professional.

Disclosures

  • The content on FamilyBalanceSheet.org may contain affiliate and/or referral links that help support this site at no additional cost to you. I only recommend products and services that I believe in.
  • Terms of Use & Privacy Policy

Copyright © 2023 · Lifestyle Pro Theme on Genesis Framework · WordPress · Log in