Proactive budgeting: the perks of planning ahead

By thinking ahead and saving for larger expenses little by little, you can minimize mishaps and keep your budget on track.

March 01, 2023

If you have a working budget, but still find yourself paying last-minute bills you forgot about, let’s talk about proactive budgeting.

A lot of people put off paying their car registration, property tax, or yearly income taxes because they haven’t put aside money for the expense. These expenses often go overlooked simply because they’re only paid annually or semi-annually. However, by saving monthly for these expenses, you can help ensure you’ll have the cash in hand by the time the bill comes.

The trick is to be proactive now so that you can avoid being reactive when the bill comes in. Dividing the total amount needed by the months you’re able to save can lighten the savings load substantially. Here are some examples:

  • Example #1: Let’s say your car registration costs about $450 each year. It may sound like a lot, but you have 12 months to save — so you’d only need to set aside $37.50 per month.

  • Example #2: The average American household spends upwards of $1,000 on Christmas. Saving a little each month can help keep you from having to use your “emergency” credit card or dip into savings. With 12 months to save, that’s just $83.30 a month.

  • Example #3: A family membership at the Henry Doorly Zoo costs $165 per year. If you save $13.75 each month, that’s less of a financial impact but the same amount of fun!

Think about your expenses that may not occur on a monthly basis: oil changes, gifts, travel, car registration, household maintenance, co-pays, taxes, memberships, homeowners or renter’s insurance, or even school clothes and/or supplies. Have you accounted for them in your budget? Proactive saving for these expenditures can take the pressure off your budget and give you peace of mind.  

Ready to take a proactive approach to budgeting? Download our Proactive Budgeting worksheet to help you get started.

We hope you found some of our tips helpful! This article is part of the Money Foundation principle, part of UBT's Five Principles of Financial Wellness Series. 


  • Personal
  • Managing Your Money
  • Financial Literacy
  • Budgeting

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