How to Budget for the Year When Everything is Expensive and Crazy
January is when resolutions flood your feed. Pay off all the credit card debt. Build a six-month emergency fund. Save for a dream vacation. In theory? Love that for us. In practice? Financial resolutions are kind of a scam, because life does not care about your spreadsheet.
When prices jump overnight, childcare and healthcare are unpredictable, and one bad week can undo months of progress, traditional annual budgeting can feel completely disconnected from real life. What does work is solid financial habits.
So, let’s reframe the strategy into building a budget that assumes instability and still keeps you solvent.
What you can learn:
How to create a Minimum Viable Budget
The importance of planning for forgotten annual expenses
How to budget for surprise expenses
A 4-step system to manage irregular costs
The benefit of a dedicated holding zone
Tools to reduce mental load
Start With a Minimum Viable Budget (MVB)
When money feels tight or uncertain, long-term goals like “save for a big vacation” or “max out retirement” can feel laughably out of reach. And that’s okay. A Minimum Viable Budget is about survival. Your MVB answers one question only: How much do we need, every month, to keep functioning?
This includes expenses you already know (or should know):
Housing
Utilities
Groceries
Transportation
Insurance
Minimum debt payments
Childcare
Necessities
Even couples who handle money very differently can usually agree on this baseline. If you and your partner don’t see eye to eye on spending or saving, starting with the basics creates common ground. Align on essentials before debating everything else.
Once this is covered, everything else becomes modular. If income fluctuates or expenses spike, you know exactly what must be protected first.
Add the Annual Expenses
Most financial stress comes from expected expenses that were just forgotten because they don’t happen often enough. These often include:
Vehicle registration or inspection
Medical expenses not covered monthly
Annual memberships (Amazon Prime, Costco, AAA)
Homeowner expenses like pest control, HVAC maintenance, or equipment repairs
None of these are emergencies, but they feel like emergencies if they’re not planned for. Keep upcoming large expenses written where you’ll see them. Add them to your phone’s calendar with alerts to give you a heads up in advance.
And if they catch you off-guard this year, that’s ok. Just add them in next year’s calendar so you’re not fooled twice.
Expect Disruption and Budget for It on Purpose
Budgets also fail because they’re built for a predictable year; one that almost never happens. Real-life money management means assuming something will go sideways and planning for it before it does.
This buffer covers things like:
Medical surprises (copays, prescriptions, urgent care visits)
School or childcare curveballs (activity fees, fundraisers, random “due tomorrow” costs)
Car issues (tires, batteries, inspections, not-quite-emergencies)
Family obligations (travel, gifts, helping out when someone needs it)
Random fees that somehow still exist (late fees, replacement cards, processing charges)
This isn’t pessimism. It’s operational realism. When disruption is expected, it stops feeling like a crisis and starts feeling like a line item doing its job.
How to Plan for Irregular Expenses
Annual bills, random-but-recurring costs, and surprise charges all live in the same category. Treat them as one system. The goal is to smooth out irregular costs so they hit your budget as small, boring weekly amounts instead of three-digit surprises.
Step 1: Look Back Before You Guess
Pull up the last 6–12 months of bank and credit card statements. Flag anything that:
Wasn’t monthly
Had three digits
Made you pause, stress, or reshuffle money
If it disrupted your cash flow, it belongs here.
Step 2: Add It Up, Then Downsize the Pain
Add up everything you flagged. This total represents the real cost of irregular life expenses. Now divide that number:
By 52 if you get paid weekly
By 26 if biweekly
Or by 12 if monthly feels more realistic
You’re converting chaos into a manageable number. For us, setting aside $25 a week (about $1,300 annually) means a $300 bill is annoying but not meltdown-worthy.
Step 3: Create One Dedicated Holding Zone
Move that monthly or per-paycheck amount into a separate account or category labeled something honest:
Forgotten Expenses
Surprise Costs
Life Happens
This money is operational cash. Keeping it separate prevents you from panicking when a bill shows up.
Step 4: Let It Roll Over and Build
If you don’t use it one month, perfect. Let it accumulate. Over time, this buffer becomes a shock absorber for both expected annual bills and random disruptions.
Build the System That Tracks Things For You
A lot of people don’t have a budget because their system is reactive. Bills arrive, they get paid, and life moves on. That works until it doesn’t.
Having records changes everything. If you have the time, use a basic Excel or Google Sheet. If you’re a tactile person who gets joy from crossing off an item, get a monthly/annual planner with all the bells and whistles (well, tabs and stickers).
And if keeping records feels overwhelming, outsourcing that mental load is a legitimate strategy. Some banks and credit cards now offer built-in spending dashboards and alerts that categorize your purchases and show trends over time.
Want to manage all your financial accounts in one place?
Rocket Money – auto-categorizes expenses, tracks subscriptions, helps cancel unwanted ones, and gives trend insights (paid).
You Need A Budget (YNAB) – rule-based budgeting that pushes you to assign every dollar a job; great for awareness and control (paid).
EveryDollar – Dave Ramsey–style budgeting with clean tracking and goals (free + paid).
PocketGuard – simple interface showing what’s “safe to spend” after bills and savings.
Simplifi by Quicken – holistic cash-flow and goal tracking with customizable watchlists.
Honeydue – geared toward couples, syncing both partners’ accounts and aligning shared budgets.
I used to use Mint, which was incredible: free, automated, and clean. But like many good free tools, it disappeared after being acquired. Now I use Rocket Money. It works similarly; automatically categorizes expenses, tracks subscriptions, and makes it easy to look up what you’re actually spending.
Yes, there’s a fee. It defaults to $9.99/month, but you can request a lower amount pretty easily. I pay under $7/month, and for me, that’s worth it just to reduce friction and decision fatigue.
When Budgeting is Too Overwhelming
Think of this year as laying infrastructure. You don’t need a perfect budget. You need visibility. Watching where your money goes is often enough to change behavior without doing anything drastic.
Pick one tracking method this month and commit to using it consistently until the end of the year.
