You’re familiar with monthly expenses. The biggest chunks are usually Accommodation+Transportation+Food. Plus Loan Repayments for some people.
How about annual expenses? Are you already familiar with yours? These are the payments that you make only once a year, or once every few years.
Confession: I’m not very familiar with my annual expenses until I sat down and wrote this article. Before this, I treated all my yearly expenses like ad-hoc payments, even though I’ve come across the advice ‘Budget for your annual expenses’ fairly often. I just didn’t digest it until now.
And maybe that’s why I tend to get surprised when the time comes for me to make those annual expenses. It’s like, already? But I already made the payments…oooh that was last year. Even worse, sometimes I forgot about these payments and have to pay fines!
Here are all the annual expenses I personally pay for, and when during the year. $ is for small amounts (how much? No sweat, I can pay!); $$ is for a couple of hundred ringgits (hmm okay no choice); $$$ means ADOI (crap must reduce expenses in the next few months).
My annual expense in January is:
- Zakat – $$$ – I try my best to pay my zakat (tithing the Islamic way) in January, but sometimes I drag this on and only make the payment before I do my taxes, in May.
Surprisingly, I don’t have any annual expenses to pay for in these three months. Woah this is a revelation.
My annual expenses in May are:
- Taxes – $$$ – Taxes for businesses are due on 1 June every year, so I submit it in May usually
- Dad’s birthday – $ – Random fact: My Dad and I share the same birthdate
- Driving license renewal – $$ – Thankfully can make advance payments; if not, so mafan to do every year. My next payment is in 2020.
My annual expenses in June are:
- FundSupermart Malaysia annual fee – $ – I use this platform to open my PRS account. They charge RM8 annually. Not a huge amount.
- Raya* – $$$ – The last time I calculated my Raya expenses, it came up to RM2095 – more than I expected! *Note: I know Raya’s actual dates and months varies every year. Let’s make this simple.
- Brother’s birthday – $ – Usually belanja makan with the family or something
My annual expense in July is:
- Sister‘s birthday – $ – The youngest one
My annual expense in August is:
- Business renewal to SSM – $$ – This one also can pay for multiple years in advance, up to 5 years. My next payment is in 2021.
My annual expenses in September are:
- Passport renewal – $$ – Technically it expires in February, but because it’s common practice to have passports with at least 6-months validity, I get my renewed in September. The next time I’m due for passport renewal is in 2022.
- Malaysian Writers Society membership – $ – Proud to be a member of Malaysian Writers Society!
My annual expenses in October are:
- ACCESS Blockchain Association Malaysia annual membership – $$ – My membership number for ACCESS Malaysia is 0001 😀
- Spotify Premium – $ – I calculate and add my Spotify Premium expenses in one go every year – just RM44.80 per year because I’m in a Family plan 😀
- Other sister‘s birthday – $ – The second-youngest one
My annual expenses in November are:
- Tenancy agreement fee – $$ – For the apartment units I’ve rented, and the one I’m renting now. The shortest duration I’ve done is 1 year; the longest is 3 years.
- Website hosting & Domain renewal – $$ – I paid 3 years’ of Ringgit Oh Ringgit hosting in advance (next due: 2020), but the domain must be renewed annually.
- ClickWP membership – $$ – To fix Ringgit Oh Ringgit’s technical issues as and when it comes up
- Grammarly – $$ – A software I use to improve my writing work
My annual expenses in December are:
- Mom’s birthday – $ – She likes family time, so usually we take the family out for dinner.
- Christmas gift-giving – $ – Sometimes I participate in Secret Santa, it’s fun 🙂
Analysis of my annual expenses
I guess here’s the fun part – making sense of all these data. From the above, I can see that:
- I have 21 different annual expenses. Most of them are categorised under Business, Donations & Gifts or Misc Needs – all categories I use for my personal expense-tracking
- I can make several years’ worth of advance payments for 5 of them – passport, driving license, website hosting, business renewal, and tenancy agreement
- I have at least one annual expense every month in 9 out of 12 months. Going to double-check my expense-tracking app in case I missed anything, but I believe everything is covered
- I NEED to prepare for the future when tax payment time will coincide with Raya time – expecting this in… 2020? Both of them are in the $$$ category, double ouch!
- It’s in my best interest to limit the number of my annual expenses. Having said that, I do plan to add a couple more, like accounting fees (for my business) and insurance, if they give discounts for paying annual instead of monthly premiums. Well I’ll cross that bridge (and update this article) when the time comes, I guess.
Annual expenses that I don’t have to make
At first, I’m like, TWENTY-ONE?? TWENTY-ONE ANNUAL EXPENSES? WHY SO MANY?
Then I did my research and found that other people, especially families, have more annual expenses to make. These are expenses like:
- Road tax and car maintenance – I don’t have a car
- Housing insurance, taxes and other fees – I don’t have property
- Children’s school fees and expenses – I don’t have kids
- Academic fees – I’ve graduated
- Credit card annual fee – All my credit cards are free-for-life types
Those of you who have one or more of the above. How many annual expenses do YOU have to make per year? If you have a lot of payments, how do you keep track of them? Do you have a system?
Did I miss any other types of annual expenses? If yes, let me know in the comments section!
I hope this mini-finance exercise will help me plan my budget better. If I STILL get fines after this, or get surprised by upcoming payments, I also don’t know what I should do -_-
Do your own list too. I’m so curious to know how many annual expenses YOU have to make, and what they are.