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12 month averages can help, somewhat, but on another set of forums, we're fond of saying, "There's no such thing as a 'normal' month."

Every month is different. There will always be some expenses that vary (sometimes wildly). There will always be an emergency or an expense you forgot or a school fundraiser or a blown tire.

A 12 month average is a good starting place, but it's just a starting place. It doesn't help to know that you need $112.34 each month to pay your 6 month insurance bill if it's due next month and you haven't already been setting that aside. It doesn't help that much to know that last year you averaged $34.16 for car repairs if you need $625 right now to fix something.


Ishtar,

Probably a silly question, but just wanted clarification. So if you allocate $50/month for car repairs but don't use it that month, what do you do with that $50. Does it sit in your checking account or do you set it aside in a savings account? And do you have subcategories in your savings account? Or does house maintenance, car maintenance, annual insurance premiums, vacation fund, etc. all get thrown together in one account? And what happens if you have a surplus? Does it roll-over into the next year, go into more permanent savings, or what?
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