Why some months cost more: the calendar behind bad luck

Take a family with ₹1,12,000 of take-home pay and ₹88,000 of regular monthly outflow: rent or EMI, groceries, utilities, a SIP, school transport, help at home. That leaves ₹24,000 in an ordinary month. Every figure here is illustrative; the method works on your own statements.

Now go through twelve months of bank and card statements and pull out every debit that did not recur monthly but will recur: fees, premiums, renewals, the trip, the festival. Here is the year from April, when both the school year and the financial year begin.

The ₹2,44,070 of irregular expenses is 18.2 percent of this family's annual take-home, which sounds manageable. It is the wrong comparison. The right one is against what is left after regular spending: ₹24,000 a month, ₹2,88,000 a year. The calendar takes 84.7 percent of that.

Spread evenly, the irregular year costs ₹20,339 a month. Take that from the ₹24,000 and the real surplus is ₹3,661 a month, ₹43,930 a year, 15.3 percent of what the family believed it had. Nothing about their spending is careless. The ₹24,000 sitting in the account in September looks spare because the premium it belongs to is five months away.

A sinking fund is a separate pot that receives a fixed transfer every month and pays the lumpy bills when they land. For this household the transfer is ₹20,340, one twelfth of ₹2,44,070 rounded up. Over twelve months it collects ₹10 more than the year's bills.

Start it now, with the first transfer in October, and follow the balance. October's ₹17,300 takes almost all of October's transfer, November's ₹41,400 cannot be met, and the fund is ₹44,240 in deficit by the end of June. It climbs back to ₹10 by September. The fund works; it needs a seed to get through its first year, and the seed is exactly the depth of that dip.

Say this family has no fund and puts each heavy month's shortfall on its credit card, at an illustrative 3.5 percent a month plus 18 percent GST on the interest. That is 4.13 percent a month, 49.56 percent a year before any compounding. Two versions of the same year, starting April with nothing owing.

In the first, every spare rupee goes to the card. April leaves ₹11,600 owing, May adds ₹18,000, and the balance peaks at ₹30,221 in June before clearing in September. November puts ₹17,400 back on, and that clears in March. Interest and GST for the year: ₹6,394.

In the second, the family pays ₹6,000 a month, the figure that feels manageable, and the rest of each light month goes where light-month money usually goes. The balance never clears. It closes March at ₹25,448, and a second year on the same calendar closes at ₹66,807.

If a household has twelve kinds of unplanned expense and each tends to happen about once a year, independently, the chance that at least one lands in any given month is 64.8 percent. That is 7.8 months a year with some surprise in them. With eight kinds it is 50.1 percent, six months a year. The experience of unexpected expenses every month is arithmetic, not a run of bad luck.

What is left after the calendar splits into two kinds, and they need different treatment. The first is certain but undated: things that wear out. You cannot know which month the phone dies, but you know it will, and roughly how often. These get a set-aside like the calendar items, priced as cost divided by working life.

Medical bills beyond what insurance pays, repairs, accidents, emergency travel: these have no date and no reliable amount. Go back three years and list every one. For this household, year one had dental treatment at ₹14,500, a washing machine repair at ₹6,200 and a car bumper at ₹9,800, ₹30,500 in all. Year two had a hospital stay where the co-pay and the items the policy excluded came to ₹23,400, a two-wheeler repair at ₹4,300 and a plumbing leak at ₹7,600, ₹35,300. Year three had emergency travel to family at ₹18,700, a geyser and wiring repair at ₹12,900 and doctor visits and tests at ₹8,200, ₹39,800.

That averages ₹35,200 a year, and two numbers come out of it. The refill rate is the average divided by twelve, ₹2,933 a month: what the buffer must receive to keep pace. The buffer itself is the worst year, ₹39,800, because a bad year can arrive before the average has had time to build up. At ₹4,000 a month it takes about 10 months to reach.

The lines below are what most households find when they go through twelve months of bank statements and card bills. Not every line applies; the ones that do go on the calendar with a month and an amount.

One lever is worth pricing before you pull it: paying a premium monthly instead of once a year. It flattens the calendar, and it is a loan. Take the ₹15,400 annual term premium. If the insurer's monthly mode is ₹1,386, an illustrative 8 percent loading, the year costs ₹16,632, ₹1,232 more. Paying that to defer most of the premium is borrowing at 1.43 percent a month, 18.59 percent a year compounded. Cheaper than a card at 4.13 percent a month; dearer than a sinking fund, which costs nothing.

The calendar on this page is built from twelve months of statements, and the hard part is the reading, not the arithmetic. Unyfy does the reading. It works from the bank and card transaction emails in your inbox and, on Android, your transactional SMS, and it parses statement PDFs from Axis, HDFC, ICICI, Kotak and Federal Bank. It never asks for your bank password or UPI PIN, and every payment is one you authorise.

Two things it does bear directly on heavy months. On Pro, its Fixed Expenses screen predicts what the coming month is already committed to, so an EMI, a premium or a bill on a cycle shows up in next month's committed total, with its amount, before the debit lands. And its Subscriptions list shows each recurring subscription with its amount and whether it is due or paid, with a detail showing how often it is paid and the past months' payments.

How much you spend at Diwali is your decision, and the sinking fund itself is a transfer you set up at your bank.

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