One of the most valuable tools for keeping your financial life as stable as possible is to improve your ability to anticipate your future expenses and financial needs. This enables you to take some steps to prepare now for those expenses and thus reduce their impact in the future.

For people who aren’t naturally familiar with planning ahead, this can feel like a major shift in thinking. Many people simply buy groceries as needed by visiting the grocery store and wandering through the aisles to grab items needed for their next few days worth of meals. Many people respond with chagrin when they find an unexpected bill in the mail.

When you live your financial life solely in the moment, you cost yourself a great deal of money. Often, you find yourself with inflated regular expenses like the higher cost of unplanned grocery shopping. You’ll also regularly find yourself “surprised” by fairly predictable financial events, and that can frequently cause people to go into a bit of credit card debt just to get through it.

A much, much better approach is to learn to become better at anticipating financial needs. There are expenses in your life that you know are coming, so if you take at least some action now regarding that expense, you’re going to be able to handle it easier when it comes due.

While this is far from a be-all-end-all list of everything you would need to do to become perfect at anticipating your upcoming financial needs, here are seven things you can do that are quite useful in terms of making upcoming expenses clear to you and preparing yourself for meeting those needs.

Buy groceries as though you won’t enter a store again for the next week

It’s easy to go to the grocery store and get items for one or two meals. You just wander through the aisles, picking the items you need for those couple of meals, and you’ll probably grab a few incidental goodies on the way.

There are three main problems with this approach, though:

  • It takes more time than necessary
  • You might miss out on sales and special offers
  • You don’t take into account what you already have at home

Anticipate your future needs by starting your shopping at home. Keep an eye out for flyers and specials, and create a meal plan around this, as well as what you already have in the freezer and at the back of your cupboard. Once you have your meal plan, create a shopping list and stick to it! Writing a list gives you something to focus on other than those tempting sweets in the checkout line.

Keep a running shopping list close to your pantry

Keep a chalkboard or piece of paper in your kitchen — stick it to the fridge if you have to! Whenever you notice something running low, add it to the list. By doing this, you won’t end up running out of your pantry staples and quickly running to the store to pick up more when in need.

This prevents you from wasting unnecessary petrol, and helps you stick to your weekly shopping list.

Make a “target sale” list and review it regularly

Make a list of all the nonperishable household and food items that you use consistently and keep it on your phone. Whenever you see any of these items on sale, stock up and buy enough to hopefully last you through to the next time they’re on special.

Some items that might make this list include:

  • Bin bags
  • Recycling bags
  • Toilet paper
  • Dishwashing liquid
  • Washing powder
  • Shampoo & conditioner
  • Soap
  • Toothpaste
  • Rice
  • Beans
  • Flour
  • Sugar

Again, this is about anticipating future financial needs, but more in the long term. I know I’m going to need soap. I know I’m going to have to cough up money for that soap. If soap happens to be incredibly cheap right now, I might as well buy that soap for my future self and save some money. So, I load my cart up with soap. Repeat this for everything on that “target sale” list.

Whenever you pay an irregular or infrequent bill, create reminders on your phone for future payments

Let’s say, for example, that you pay a property tax bill every six months. Rather than being “shocked” when a property tax statement comes in the mail, stick a reminder in your phone to pop up once a month to remind you that property taxes are coming and you should put aside a portion of that property tax bill now so that it’s not overwhelming when it arrives.

While this strategy of setting up alerts for such bills doesn’t completely solve the problem, it is a simple step that most people can take that will put them in a position to be more in control of their irregular bills. A much better second step is to automate weekly or monthly savings for those big irregular bills.

Regularly examine the condition of your car, home and major appliances

There are few surprises less pleasant than having an appliance fail on you when you need it or have your car break down on you when you need to get to work or have a major home issue strike out of the blue. Those things tend to be incredibly expensive, not just in the repair cost but in the expenses incurred while dealing with it.

Is there anything noticeably wrong with them? Do they sound different? Does something look different or out of place? Is there any slight issue with the operation? Is there any maintenance or cleaning that should be done?

Noticing those issues early can save you a ton of money and likely avert a crisis that will affect other aspects of your life. Not only that, get into the habit of giving things a quick look when you’re getting ready to use them. Glance at your tires when you’re going to the car. Listen to the sounds your car makes when you start it instead of just waiting until it sounds so bad that it grabs your attention.

Just be more aware of the expensive stuff that you rely on constantly.

Become more honest with yourself

What does this have to do with anticipating financial needs? The key here is in the word “needs.” The more honest you are with yourself, the more you begin to realize what things in your life truly are needs and which things are actually wants that, in the big scheme of things, really aren’t all that important.

This requires a lot of self-honesty, more than many people tend to apply to themselves in their daily life. We either try to avoid thinking about things like that or we convince ourselves that things we want are essentially needs and thus it’s fine to spend our hard-earned money on them, even if it means letting down actual needs further down the road.

Do you really need this new book at the bookstore right now? What about this new dress? Do you really need this food item? Do you really need to buy that new television next month?

So often, we work our desires into such a frenzied state that we feel like they’re needs, and it’s only through real honesty with ourselves that we recognize they aren’t. That requires reflection and honesty with yourself.

Plan for the future

Another valuable way to anticipate financial needs is to simply sketch out your life going forward in as much detail and with as much realism as you can. What do you anticipate happening or changing in your life over the next few months? Over the next year? Over the next five years?

Simply ponder that question regularly and, then, use those realizations to influence what you do with your money now so that you can make those future events as smooth and as positively impactful as you possibly can.

For example, maybe you’re pretty sure that you’re going to move next year and get a new job. You know this is coming. What can you do today to make that move and job change as smooth as possible? Maybe you can start polishing that resume. Maybe you can pick up a few skills that will help you find a job. Maybe you can start getting to know people in your field in that new area.

Sketching out your future in detail sets the stage for you to be more proactive about those future events.

Action from anticipation

These strategies are good for helping you start to think in terms of anticipating your financial needs, but how do you start taking action regarding your future financial needs? Again, it really depends on what you observe, but here are some clear steps you can take to handle many situations.

  • Build an automated “future expenses” fund. If you know an expense is coming in the future, start saving for it now, but make it automatic. Get ahold of your bank or use online banking tools to automate regular small transfers from your checking into your savings account so that you’ll have the money built up when the expense comes due. This works for any irregular expense that’s at least somewhat predictable.
  • Spend money and time now to fix obvious upcoming problems while they’re small and inexpensive. If you’re looking for minor issues with your car or your appliances or your home and you identify something that could get worse quickly, get it fixed now. Don’t wait around on it. Do it now. Make it a huge priority.
  • Have some flexibility in your grocery budget so you can afford to stock up on items on sale that you know you’ll use, and then do so when you notice a nice sale. If you normally spend R1000 a month on food and household supplies, budget R1200 a month for it and use that flexibility to stock up on discounted items. Eventually, you’ll be able to trim that budget line quite a lot because you’ll be on a cycle of buying highly discounted stuff in bulk.
  • Add something to your to-do list today that will help make something coming in the next year or two easier. Take that vision of your life a year or two in the future and identify something practical you can do today to make that vision a reality. Add that to your to-do list and take care of it today.

Article sourced and reworked from The Simple Dollar.