7 Annual Expenses You Should Start Planning for Now

Forgetting about one of these expenses could break your budget.

Your recurring monthly expenses are probably the ones you spend the most time thinking about, but they're not the only costs you have in a year. You might have to deal with unplanned expenses, which you can hopefully cover with your emergency fund, and then there are irregular expenses that might only come once or twice a year.

It's easy to overlook some of these annual expenses, but doing so could leave you unprepared for them when they arise -- and that could derail the rest of your budget. Here are seven common annual expenses that you should factor in to your budget now so they don't catch you off guard.

1. Holiday expenses

We just finished up one holiday season, but the next one will be here before you know it, and holiday expenses cost most people several hundred dollars. Rather than taking on debt for the holidays, start budgeting a certain dollar amount each month so that you're ready when the season arrives. You can also try buying gifts in advance if you find a great deal. Don't forget about the cost of holiday travel and meals. You can use what you spent on the 2019 holiday season as a baseline to estimate your 2020 holiday costs.

2. Wedding expenses

Coming up even faster than the holidays is wedding season. You may not know all the weddings you're going to be attending this year yet, but as soon as you do, begin budgeting for them. Include travel costs, gifts, and wedding attire. If you're going to be in a wedding, you might also have to include the cost of a bachelor or bachelorette party and an outfit for the rehearsal dinner. 

3. Vacations

You probably plan your vacations months in advance, so budgeting for them ahead of time should be relatively straightforward. Figure out the total cost of your trip and then divide that by the number of months you have until the trip. Then you'll know how much you need to save each month. Remember to include travel costs, hotel stays, rental cars, food, admissions to any parks or events you plan to visit, and a little extra spending money just in case.

4. Insurance premiums

Your renters or auto insurance premiums are normally due once or twice per year. You can check with your insurer to figure out how much it will cost or shop around for a new policy if you think you can score a better rate. If you're unable to pay the full cost when it is due, you might be able to pay monthly instead. That said, it's best to pay it all at once if you can afford to do so because many companies give you a paid-in-full discount.

5. Annual subscriptions

You may have annual fees for a gym, a streaming service, credit cards, or magazines. Check how much these are and when the company is going to bill you so that you can work them into your monthly budget. Look back through your credit card and bank statements for the last year to make sure you're not missing any and cancel any subscriptions you're no longer using to save yourself a few dollars.

6. Property taxes

Some mortgages hold the money for your property taxes in escrow and then pay them automatically every year. If this is the case for you, you don't have to worry about them. But if it's not, you must remember to set aside money every month to go toward these taxes. Your tax bill might vary slightly from year to year, but you can use your property tax bill from last year as your jumping-off point. Maybe budget a little extra just in case it ends up costing more this year.

7. Auto registration fees

Vehicle owners must renew their auto registration once per year and you can look at the stickers on your current license plate to figure out when yours is due. This should tell you the month and the year that your current registration will expire. You must pay your registration fee for this year before your existing registration expires. The exact cost varies from state to state. Check with your state's Department of Transportation to find out how much yours will be.

This isn't a comprehensive list of all the annual fees you might run into. Look back through your expenses from last year and note any other annual fees you expect again this year. That way you can be sure they don't upset your plans to beef up your savings account or force you to take on debt. It's much easier to add these costs into your budget now and be ready for them when they arrive.