Planning for non-monthly, but still periodic expenses...

So, from a planning perspective, if we have an annual, semi-annual, quarterly, or other non-monthly expected expense, we will take the value of that expense, multiply it by it's period, then divide by 12, 24, or 36 to determine the monthly cost of that expense.

Example 1:  Costco Membership.  Every month we budget 1/12th of the annual dues until the fund reaches the value of the dues, which is lined up with the month in which it renews such that when we pay the dues, the fund returns to zero + 1/12th of the value of the annual dues.

Example 2: Tires.  We have a history of needing tires just about every 3 years.  So, we take the average cost of the tires in the past and divide that cost by 36 months to determine how much we need to save each month for that pending transaction.

Is the Target feature what we should be working with for each item that shares this characteristic?

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  • The "Needed for Spending by [date]" target is probably the one you want to use for that.  It will automatically calculate how much you need monthly between now and the spending date, so if you miss a payment or want to add more one month, it will adjust the target to compensate.

    Things to note:

    1) If you set it to repeating, you need to spend the money BY THE END OF MONTH YOU SET AS THE SPENDING TARGET. If you do that, then it will reset appropriately when the month rolls over. If you don't do that, then anything that is in that category when the month rolls over counts toward the next iteration's target, and you'll have to reset the target for it to work right again.

    2) The month of the spending target counts as one of the months where you need to make a contribution. So if your Costco membership renews in May, and you set the target for May, YNAB will expect you to finish funding the category in May.

    3) Money spent in the category still counts toward the total, so if your target is for $1000 in May, and you've saved up $500 in January and spend that money, it will still only prompt you for $500 total through May.

    3) Alternatively, you can do the math to figure out how much to contribute per month and set a monthly savings target. That way, you don't have to worry about the weird rollover issues, but it won't recalculate if you miss a month.


    Someone please correct me if I'm remembering any of this wrong.

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    • Fuzzball Meows That all sounds right on to me! Needed for Spending by date targets would be my recommendation here, too, SmashCrashBoing , though I am also partial to a simple Monthly Savings Builder target in many cases (especially once you've reached month 1 of the 12 month cycle). 

      But it's up to you - you can read more about the target types here 😊

  • Other thing to note:

    You're probably not at the beginning of the cycle for all of these expenses. 

    Until you pay for each one, you might need to fund a little more. For example, if Costco dues are $60 and they're due in December for you, you'll want to put aside $15/month now until December, and then you can go back to the $5/month for the following years.

    Alternatively, you could seed the category: assign $45 in September, then $5 thereafter.

    I do the calculations on my own and then using a savings builder target because I don't mind the math, and I don't like babysitting the other targets. 

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      Move Light Sound Life Great point.  Budgeting bliss occurs when everything in the budget is being funded at nominal amounts.  It makes it so much easier to see the big picture and be intentional with budgeting.  If the capital is available, I would choose to catch up true expenses early so that future months can be consistent.

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