Creating a Budget for Irregular Expenses

It looks like we’ve finally whittled our monthly expenses down to a level where we’ll have from *$1600-$1900 left over at the end of each month.

(*Much of that money will pay for somewhat more irregular but predictable expenditures like hair cuts, clothes, and saving for vacation or gifts.)

We just played around with numbers last night, developing a sort of rough draft/outline of where we think we’d like to go. One bright spot is it looks like we could actually get close to paying off our credit cards within two years. It will take real attention and discipline, but it already seems to be getting a little easier to keep at it.

The challenge will be handling the non-fixed expenditures without letting them bust the budget. According to the link above, I think we’re on the right track — we have tracked many of these expenses over 12 months so we can break them down to a monthly number. Also, we’re planning to build up our savings, as that article suggests, to create a pool of money for them.

Here’s another couple of great links: one talks about creating a personal escrow account (which is a separate savings account set up just for these expenses). Or check out this Freedom Account, a separate checking account, to handle them (the article advises opening up an Ing Direct account, something I remember being a fan of when I first heard about it, although we have yet to try it).

Got any great ideas for budgeting for irregular expenses?