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A common budgeting trap is treating big costs as one-time events instead of recognizing their natural flow over time. Traditional methods have us believe that each project or expense shall have its own separate pot of money, and when the time comes, we simply pull from it.
But life and money rarely work in such neat compartments.
For example, Christmas costs don’t happen on December 25; they may begin with airline tickets in October, then gift shopping and greeting cards in November, and finally extra groceries and last-minute gift cards in December.
By this time of year, a lot of us are itching for spring… and gardening. Every February, I’m tired of winter and want to console myself by buying seeds and planting all the things in the kitchen window. That inevitably leads to buying pots for transplanting seedlings (because they always grow faster than the ground warms), plus soil, extra compost, trellises, and whatever else the garden resulting from my February zeal eventually requires.
Naturally you can see that this progression leads to a lot of money spent over the spring season that started as a late winter impulse.
But there’s a flip-side.
These kinds of investments are naturally spread out so they don’t hit all at once. Whether this reality sneaks up on you, or you use it to your advantage can define the difference between being a cashflow master or a victim.
Because the same principle applies to vacations, birthdays, holidays, home improvement projects, all costs that build in stages rather than landing all at once.
A trip isn’t just the flight and hotel. It’s also the small purchases along the way like deposits months ahead, new gear weeks before, meals and experiences once you’re there.
The secret to making big expenses like these feel smaller? Planning how much and when such expenses must fall across time. And identifying which ones require a designated draw from savings versus which ones can be absorbed in your usual monthly spending.
So instead of letting big expenses sneak up on you, take control by mapping them out. Cull unnecessary spending first (like sorting through my existing seed stock instead of impulse-buying a whole new vegetable garden). Then, break down what’s needed and time it wisely.
What can you pay for early? What can wait? What can wait even longer? By intentionally spreading costs across time, you can keep your budget, no matter what type you use, breathing easy.
Because being smart with money isn’t just about spending less of it. It’s about being in control and spending intentionally, both how much and when.
When you control both of these variables, you take control of cashflow, and this simple principle makes all the difference.
So what’s coming up for you? A trip? A big project around the house or yard? A string of family birthdays? Whatever it is, give Future You a break by honoring the principle of cost timing. Determine how you can stretch out the expenditures in a thoughtful and intentional way to keep your cashflow running smoothly.
As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have troubles.
Harrington Emerson
I hope you enjoyed this edition of Under 2, an email series designed to share quick bites of wisdom to empower your financial journey (while keeping it short). Be sure to sign-up below to get these messages in your inbox.
All for now,
Lindsey