10 Easy Steps For Budgeting Recurring Expenses

This post was updated on June 10, 2026

Recurring expenses are also known as fixed expenses. They can occur monthly, like utilities, or be a periodic expense, like car insurance. Here are 10 easy steps on how to budget for your recurring and periodic expenses.

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1. Keep Your Personal Overhead As Low As Possible

Think of recurring and periodic expenses as your personal overhead. The lower you can keep your overhead, the more money you will have available to use elsewhere. As you go through these steps, consider whether you really need this expense.

2. Write Down All Of Your Periodic Expenses

Periodic expenses are recurring expenses that are not paid monthly. These are bills like car insurance, renters/homeowners insurance, life insurance, and real estate taxes. A periodic expense can also be a one-time big expense that you want to save for in the future. Examples would be a vacation fund or a car repair fund.

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3. Average Your Monthly Budget Amount Periodic Expenses

As explained above, your periodic expenses are constant but are not paid monthly. For example, car Insurance is due every 6 months. So, for car insurance, your monthly amount is $150 ($900/6 months). The car insurance company would be happy to set up a monthly payment plan and charge you a $5.00 fee. So keep your money in the bank and make 2 payments a year vs. 12. This way, you can pocket the $60 a year in monthly payment fees they would love to charge you.

4. Write Down All Of Your Monthly Recurring Expenses

These are bills like mortgage/rent, utilities, and car payments.

5. You Can Reduce The “Fixed” Amount

You should now have a complete list of all your monthly recurring and periodic expenses. Take a step back and look at them. Are you in the habit of paying the “fixed” amount month after month? How can you reduce any of them? Call your cable company, cell phone provider, or insurance company and try to lower their rates. This is why I prefer the term ‘recurring’ vs. ‘fixed,’ as you do have control over the ‘fixed’ amount you pay each month.

6. Make A List Of All Your Utility Bills

Utility bill payment amounts vary month to month, such as electric, heating, and water bills. So, electric costs would be higher in the summer, and natural gas costs would be higher in the winter months. To make the budgeting process easier, estimate the annual cost for each utility and divide it by 12. The estimated annual cost of electricity is $900. So the blended monthly amount is $75.

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7. Make a List of Your Debt Payments, Excluding Your Mortgage

Recurring expenses also include your monthly debt payments. These payments are typically car loans/leases, student loans, home equity loans, and credit card payments. Exclude your mortgage payment, as we included that above as a monthly recurring expense.

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• How I reconcile my recurring expenses account 

8. Review your recurring expenses under the 50/30/20 Rule.

Recurring expenses are considered “Needs” under the 50/30/20 rule. Make sure your recurring expenses do not exceed 50% of your monthly income.

9. Calculate The Amount Per Paycheck

Now we need to calculate your recurring expenses for your 15-Second Spending Plan. If you are paid bi-weekly, your $1,600 of monthly recurring expenses take up $800 of your bi-weekly paycheck.

For those paid weekly or every other week, you will have months when you get an extra paycheck. Think of these extra pay months as a margin of safety in case you go off plan. If you receive any bonuses, they are also a margin of safety.

10. Set up a Payday Routine For Just Your Recurring Expenses

The final step is to ensure the money is available to pay your recurring and periodic expenses when they are due. So, you MUST set up a separate account to transfer the amounts from Step 9 above. Here are the step-by-step instructions for doing this.

• Make The Funding And Paying Of Your Recurring Expenses Automatic

Conclusion

Being able to pay your recurring expenses reduces financial stress and increases happiness! So, start following these 10 steps today to put yourself on a path to financial happiness.

Please leave a comment if you have any questions.