"I've always wondered why every time we get a bonus check or tax return it disappears immediately ... because we haven't been planning for ALL the money we spend."

Do you find yourself using funds like income tax returns to pay for large or additional expenses each year or do you plan for these expenses from your monthly budgets?

We try not too but this year it paid for the $750 annual water/sewer/garbage bill. Since the return was $800 we pretty much came out even. Our property taxes are in our mortgage payment held at the bank so we don't worry about that. The other annual expenses of car & house insurance come out on a monthly basis.

Our refund check just goes into savings, however invariably it won't take long before some expense comes up that just about equals that refund check. Ever feel like you just can't win sometimes?  E

elovestea:

Ever feel like you just can't win sometimes?

Often.

We live off 2/3 my husbands income and have 1/3 automatically put into a savings account.  Normal monthly expenses come out of the first amount, and things like taxes/tags and insurance for the car, home taxes and insurance, home improvements, etc. are taken from the savings, when they come due.  I also fund my IRA account from the savings account.  Any bonus money is also put into savings.  We try to keep 3-6 months of expenses in savings.  Any extra is invested for retirement. 

Years ago, I always divided annual (and bi-annual) expenses into 12 months and put that amount into an envelope each month so that I could cover those items when they came due.  If we knew we would need new tires that year, we would price them and save for that monthly, until we had enough for the tires.  I like the automatic savings account much better. 

We try not to get a tax return.  Why should the government have the use of our money all year.  I'd much rather plan to owe some than to get a whopping refund that drew NO interest.

I also have a Dollar Savings Account.  That's where I deposit all my dollar bills all year long (I use cash only for weekly shopping from a budgeted amount).  I also budget and pay myself $20 a month to cut my own hair, that adds up to be $240 a year that goes into the Dollar Savings Account.  I almost always save about $1,000 a year with this savings method.  This money is used for Christmas and emergency non-budget items.

~Gingerbread 

We still try to get a tax refund back, because our deductions are varied and on any given year we're afraid of paying in. So we keep our W3 the same, and hope for a refund. In the past our refunds have always been earmarked for something, usually paying off a credit card. Then we'd put $3000 back on in a year again. So we started looking at why we were always short 3K over a year, and determined an accurate budget.

 This year is supposed to go for either:    a. household expenses if dh doesn't have a job by Feb., when unemployment runs out, OR b. pay off our debt, OR c. fix the transmission on my van finally.  We looked at some minivans at a car lot last week and my van put them all to shame. It really is worth fixing, we just need the cash to do it.

I don't really have any large annual expenses. Property taxes are in with my mortgage, and insurances are monthly.

Gingerbread,

you are just too perfect. I wanna be like you.

Well we almost have no annual expenses as we pay all our annual expenses previous per month. But most of our costs are covered by our incometax which is already paid for when you receive your monthly income as here in Holland: TAX COMES FIRST. So we pay our tax each month. Also Gas/|Electricity we pay the same amount of money each month. Once a year the meter is checked and what you used extra/or less you pay extra/or get refund incl. interest. Also we pay propertytax and wastetax etc each month.That is not directly paid for from our income( as so many other taxes, we live in a taxpaying country) But I must admit, I don't have to be afraid of January coming.

 WE are self employed so we pay our income tax in quarterly payments. We try to plan to not get a refund. Sometimes we have gotten refund if our income was lower than expected. If that happens, we apply it to the next years taxes so we can make lower payments. Babs