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25 Annual Expenses to Budget For Now

Abby Hayes
A Costco shopping cart is shown at a Costco Wholesale store in Carlsbad, California September 11, 2013. REUTERS/Mike Blake

Did the holidays sneak up on you last year? Do you find yourself scrambling for cash to pay insurance premiums or car registration fees? Do copays for your annual dental and eye exams throw your budget out of whack?

If you're like many people, you forget about some of these annual expenses. Even though you know you'll have to pay them at some point during the year, they're out of sight and out of mind until you get hit with an unexpected bill.

And when you're suddenly scrambling to pay $200 for your car registration, $500 for holiday gifts or even $75 for your dental visit copay, your whole monthly budget gets thrown off. Then, you just wind up on a financial roller coaster for the entire year.

But you don't have to live this way. Instead of dealing with constant unexpected expenses, learn to expect these annual costs. Add them into your budget each month, and you'll be cool as a cucumber when those bills come in the mail.

Monthly budgeting for annual expenses

Budgeting for annual expenses when you make a monthly or biweekly budget is simple. Just divide the total expense by 12, and set aside 1/12 of the overall payment each month.

You can leave this money in your checking account until you need it, or move it over to savings for safe keeping. Having immediate access to the money when it comes time to pay these expenses matters more than where it's kept.

So to start your new year off right, go through last year's spending to find the annual expenses you need to account for. Add up how much you spent on charges that come at the same time each year, divide it by 12 and set aside some cash each month for these budget items.

25 common annual expenses

Your list of annual expenses will vary, depending on your circumstances. So you'll want to take the time to look over last year's spending. Check for expenses that came up once - or twice, if they're paid every six months - and write down the cost for each one.

Just so you don't miss any annual charges in your budget, here's a list of 25 of the most common yearly expenses:

1. Auto registration fees

2. Annual scheduled car maintenance

3. New tires and brakes (as needed)

4. Car insurance premiums

5. Renter's insurance premiums

6. Holiday, birthday and anniversary gifts

7. Holiday and birthday parties/entertaining

8. Pet wellness visits and vaccinations

9. Pet tag/licensing fees

10. Copays for annual physicals, dental exams and eye exams

11. Life insurance premiums

12. Union dues

13. Professional licensing/subscription fees

14. Warehouse club membership fees

15. AAA membership fees

16. Other membership dues (local museums, zoos, etc.)

17. Annual credit card fees

18. Tax preparation fees

19. Annual home maintenance (carpet cleaning, gutter cleaning, tree trimming, etc.)

20. Vacations

21. Magazine and newspaper subscriptions

22. Other subscriptions (Netflix, Amazon Prime, Hulu, etc.)

23. Homeowner's insurance and taxes (if they aren't escrowed with your mortgage payments)

24. Homeowners association fees

25. Taxes on side business income or interest income

The first time you decide to budget for annual expenses, it can take some time. After all, you'll need to go back over bank statements or your budgeting software for the past year to make sure you account for everything.

But it won't take long before you see the benefits of budgeting each month for annual and one-off expenses. As soon as you get hit with the bill for your life insurance premiums, or the reminder to renew your license plates, you'll breathe easier knowing you already have that money set aside.

Abby Hayes is a freelance blogger and journalist who writes for personal finance blog The Dough Roller and contributes to Dough Roller's weekly newsletter.

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