Determine what you spent last year for periodic expenses. Assume that you will spend at least this amount again this year.

Don’t hide expenses! Just because you don’t list an expense doesn’t mean you won’t have to spend money on it. Don’t forget things like back-to-school expenses, auto repairs, and birthday gifts.

Remember that some items, like auto insurance premiums, may occur more than once a year.

Expect the unexpected. Cushioning your savings account for those “unplanned” expenses can make the difference between a minor financial setback and a major financial disaster.

When you have a realistic idea of what you will need to spend on periodic expenses during the year, divide the total amount by 12 and save that amount each month. Designating a savings account for this purpose may help to organize this process. Check with your financial institution, you may even be able to have the amount automatically transferred.

Accelerate your savings schedule by including all of your "windfall" money. This “free money” includes increased income from a pay increase, birthday gifts, insurance settlements, escrow overages, and inheritances