Most people don’t really budget for things that are large on a yearly or even monthly scale, but you can and probably should.

For example, I know that I use my headphones a lot and being without them would be really annoying. Budgeting based on buying them asap because I need them is a really painful way of managing that cost because I can’t do anything else at the same time and it is expensive. If instead I set aside a smaller amount while I still have working headphones it is much easier.

My formula for working out the cost is fairly simple. How much does it cost for an item to fill the need? How long do I expect that item to last in the worst case? How much would I therefore need to save per week for that cost to be saved before the current item needs replacement.

My headphones cost around $100. I expect to need replacement not sooner than about 16 months. So I should save $75 per year which works out to less than $2 per week. If I just save $2 per week I will hit my goal of $100 within the year and of something goes wrong earlier I can make the difference up the normal way. If I end up not needing a replacement by the time I hit my goal I can keep saving for a higher cost option or move that saving to another goal to boost that.