Media type · Insurance, visa, flights, tax prep
Annual extras
Costs paid once or twice a year that a monthly budget misses.
Key facts
| Examples | Insurance, visa, flights, tax prep |
|---|---|
| Frequency | Annual or seasonal |
| Treatment | Sinking fund |
| Risk | Several land together |
| Review | Once a year |
Divide by twelve
The simplest way to absorb a lump sum is to set aside one twelfth each month. If several extras land in the same quarter, build the sinking fund earlier.
Frequently asked questions
Is a trip home an extra?
Yes. It is recurring but not monthly, which is the definition of an annual extra.
Do subscriptions count?
If they are billed annually and would hurt when they land, yes.