JustCurious
Thinks s/he gets paid by the post
- Joined
- Sep 20, 2006
- Messages
- 1,396
We often discuss annual expenses on this board which is a very important thing to track to determine if you are or can be financially independent. But when tracking your annual expenses, how do you account for large infrequent expenses, like buying a car or making major home repairs or renovations? For example, lets say your annual expenses for the last 3 years averaged 60k, but this year you decide to buy a new car for 30k so your total expenditures are 90k. Would you report your annual expenses for this year as 60k or 90k? Would you say your average expenses for the last 4 years was 60k or 67.5k?
I can imagine several ways of handling this. One way is to simply count all expenditures as expenses, regardless of how large or how infrequent. Another way would be to have a separate capital expenditure fund set aside for large expenses like a car or a major home repair or renovation, and track that spending separately. Is there a consensus on how to handle this?
I can imagine several ways of handling this. One way is to simply count all expenditures as expenses, regardless of how large or how infrequent. Another way would be to have a separate capital expenditure fund set aside for large expenses like a car or a major home repair or renovation, and track that spending separately. Is there a consensus on how to handle this?