Failing to account for annual bills
Most people keep track of their monthly expenses such as mortgage payments, grocery, transportation, and entertainment. On the other hand, they fail to account for annual expenses. For example, if you pay your life, health, and auto insurance premiums on a yearly basis, you might forget to add it to your monthly budget. Similarly, if you have a website, you might forget to add the yearly web hosting charges to your budget. Other annual expenses that people tend to forget include credit card annual fees, annual car maintenance costs, HOA fees, and taxes. To avoid this problem, make a list of all your annual expenses, add them up, and divide the total by 12. Set it aside each month so that you have enough cash to pay your annual bills without having to dip into your savings or funds that you have earmarked for other purposes.
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