Recurring expenses: half your month can be logged once

In a typical household, between rent, service charges, utilities, subscriptions, insurance and instalments, half of monthly spending is already decided before the month starts. That isn't an optimistic estimate: add it up and see.

Which has a very concrete practical consequence: half your expense tracking can be set up once and then run itself.

Why it matters more than it looks

It eliminates half the monthly work. Without recurring entries, every month you retype rent, power, gas, internet, three subscriptions and two instalments. Ten or twelve identical entries that add no new information. It's exactly the kind of repetitive work that makes people quit.

It's what keeps your month complete even when you log nothing. A month with only the variable expenses in it shows half your spending and looks like a cheap month.

It lets you see next month before it arrives. With recurring expenses entered forward, the question "can I afford this?" has an answer on the 1st rather than on the 25th.

What goes in as recurring and what doesn't

Yes:

• Rent, service charges, utilities
• Subscriptions of every kind
• Insurance and health plan premiums
• Purchase instalments, for as many months as they last. It's in interest-free instalments
• The monthly fee for your tax regime, if you're self-employed
• The spread-out portion of annual costs — insurance, registration, tuition — as a monthly line of directed saving

No:

• Groceries. They happen weekly but the amount changes, and logging them as fixed at an average hides exactly what you wanted to see.
• Fuel, for the same reason.
• Anything whose amount varies by more than 20% month to month.

The test: if the amount is the same or nearly, it's recurring. If it changes, it's variable and gets logged when it happens.

Utilities that vary: the middle case

Power and gas are monthly but move with the season. Two ways to handle them:

1. Log them as recurring at the annual average and correct when the real one arrives. Advantage: next month is always complete. Downside: you have to correct.
2. Log them when they arrive. Advantage: always exact. Downside: your projection for next month falls short.

The first is better if you use the projection to decide. The second, if you only look backwards.

Review them every three months, not every year

This is the maintenance almost nobody does, and where the money is:

• Amounts change. Rent goes up, the subscription raises its price, insurance adjusts. A recurring entry at the old amount makes your budget lie downwards, month after month, without anything breaking.
• Subscriptions accumulate. It's the category where what you pay for and don't use shows up — the most profitable finding of any review, because it's cancelled once and saved permanently. It's in small expenses that add up.
• Instalments end. If a twelfth instalment is still showing up in month fourteen, there's a recurring entry that never got cancelled.

The monthly close is a good place to do it, once a quarter.

In one line

Set up once everything that repeats at the same amount, leave what changes as variable, spread annual costs into a monthly line, and review the list every three months — which is where what you pay for and don't use turns up.

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