Annual payments all falling in same month!

Type_45

My annual bills:

April: Car MOT/service, TV licence, Home Insurance = ~ £800

May: Car Insurance = ~ £550


Paying monthly (other than MOT/service) is the obvious answer. But that would increase my car and house insurance by ~10%.

Anyone got any solutions?



I can afford these payments quite easily, and it's fine. But that may not be the case in future years, and it's also not good seeing such an amount of money disappear from my account in such a short space of time. It's also possible that unforeseen things will crop up in those months making things tighter still!

💸

colsten

There is nothing to stop you to budget for your spending, e.g. on a monthly basis. You don't actually have to pay monthly, which can often be more expensive than paying annually. Put the money into a separate account if that makes it easier for you.

If in future you are unable to afford the payments, the obvious answer would be to look for cheaper options where possible.

dunstonh

Anyone got any solutions?

Save in advance.  You know the next bill on these is in 12 months time.  So, put a monthly amount aside for the total (and a bit more for increases).

Back in my younger days when money is tight are you are just starting out, we operated two current accounts.   Just after payday, a fixed amount would transfer to the number 2 account.  All the fixed bills, whether monthly, quarterly or yearly would come out of the number 2 account.   The monthly s/o to the number 2 account totalled the annual bills.   So, we knew what we had left in the number 1 account was available for spending on food or discretionary items.

The banks used to refer to them as budget accounts. I don't think they do any more as banking isn't quite the same as it used to be.

Today, we still operate the two accounts although it's for convenience now rather than needing to control the budget.

Eco_Miser

Monthly, but not quarterly, TV licence is the same price as annual. Could you move an annual bill to a different month? And as said, save monthly in advance.

GeordieGeorge

Type_45 said:

My annual bills:

April: Car MOT/service, TV licence, Home Insurance = ~ £800

May: Car Insurance = ~ £550


Paying monthly (other than MOT/service) is the obvious answer. But that would increase my car and house insurance by ~10%.

Anyone got any solutions?



I can afford these payments quite easily, and it's fine. But that may not be the case in future years, and it's also not good seeing such an amount of money disappear from my account in such a short space of time. It's also possible that unforeseen things will crop up in those months making things tighter still!

💸

You know that they are coming, so you have enough money set aside to cover them. If you aren’t budgeting for this sort of thing then you need to start doing it.

A savings account or extra current account would be the normal way; you put enough in there each month for the average bills, and pay them from it when they become due.

You should also have a buffer of at least three months income, as this can stop a minor drama over an unexpected cost turning into a life-changing crisis.

JezR

It is also often possible shopping around to get home insurance on a monthly basis at no extra cost, although if this was renewed back in April it will be something to consider for next year.

MovingForwards

MOT and service can be done earlier and not the date it's due, potentially bringing it back to March.

Cancel your car insurance and home insurance partway through the year and take a new policy out that will split them further away from everything else.

Alternatively add up how much everything costs, split that by 12, then each payday save the money.

My car outgoings and home insurance are paid out of a separate current account and each month I put £100 which is more than enough for MOT, repairs, tax, both insurances.

[Deleted User]

Leverage your credit card - if you time it right, you can split it the payments between two months with a bog standard 56 days interest free option.

As for TV licence, just use my Firestick now and works fine for my usage.

Novice_investor101

Agree with the previous comments. I have a savings account I’ve names Annual Bills. I added up what I estimated all the bills that come around once a year will cost in total, divided that by 12 & set a monthly standing order up to pay into the savings account. 

Then when a bill comes round the cash is there ready to pay it. 

p00hsticks

Eco_Miser said:

Monthly, but not quarterly, TV licence is the same price as annual. Could you move an annual bill to a different month? And as said, save monthly in advance.

But they will expect you to pay six months in advance - so for the first six months you will pay £26.50, and £13.25 a month from then on....

Notepad_Phil

As per many of the posters above, divide the sum by 12, add on a little to cater for inflation, then start putting that away every month. You can also start to add other things that you start realising have a predictability about their occurence - e.g. that summer holiday you always have, the replacement car that you buy every 4 years, etc, etc.

I've done this for the last 20 odd years and it's great to know that the money is there when the bills come around. The easiest way I find is to set up a standing order and pay it into a separate dedicated bills account - you'll soon get accustomed to the lower amount in your main account and won't get tempted to buy something just because you've got the money in there.