Budgeting can be a valuable exercise for any family, whether you’re just scraping by or you have a nice cash cushion month to month. But “month to month” is one of the key assumptions of most budgets. Since most of us get paid on a twice-monthly or monthly schedule, it makes sense to budget across the same time period.

This works fine for most expenses like your mortgage payment, utilities, groceries, shopping, and clothing purchases, but what about large, irregular expenses?

Some large expenses, like a car payment, are easily categorized into a monthly payment because that’s how most loans work. But what about other expenses like a vacation, a new water heater, or others that are large but not commonly financed?

Putting these purchases on a credit card would essentially make these large purchases monthly payments, but we all know the adverse consequences that high-cost debt can lead to, not to mention how easy it is to charge items to a card and allow them to fall from our memory, meanwhile incurring 15% or more of interest charges per year! Anyone with a high credit card balance has probably fallen into that unfortunate trap (I’m guilty too!).

I believe large, infrequent purchases are best handled by tweaking the formula just a little. Instead of buying the item first and making payments over time with interest, you can set money aside over time in a specific cash “bucket” that can be tapped into at a later time to cover the large expense. Oh, and those deposits to your cash bucket can earn interest as well.

For example, my family likes to take a few vacations each year. Some are modest distances and cheap stays at the home of friends and family, while others require flights and hotels. Overall we’ve focused on an amount of money that we would like to spend on vacations each year. For us this is $2,400.

To save for this expense, I opened a cash savings account with my investment partner Betterment, linked my bank account, and set up an automatic contribution of $200 each month to be deposited to the account. Betterment is currently paying 3.75% interest annually on cash savings, so my account is earning a bit of interest each month as well.

Having this growing monthly balance in my savings gives me much more clarity of what cash I have for this large expense. When the vacation is complete, I simply add up my total vacation spending, then go into my Betterment cash savings account and make a withdrawal from the savings account into my checking account to cover the vacation expense.

This strategy also creates a nice balance between financial constraints and financial freedom. I know that I can’t go hog-wild when vacation spending, but I also know that I can confidently spend the funds that are in this savings bucket.

A large, unexpected home expense can follow a similar pattern. My family targets $2,400 per year for these expenses as well. When we needed to purchase new tires for $800 recently, we tapped into this savings bucket so it didn’t blow up our budget and bleed significant cash from our checking account.

Where do you draw the line between what expenses to pay as part of your monthly budget, and which expenses to tap into your saving buckets for? I don’t think there’s a hard and fast rule. For me, I generally say that any expense above $250 I’m going to seriously consider tapping into my savings buckets.

It’s important to keep in mind that your emergency savings should not be used for these types of expenses. Your emergency fund is there in case of a true emergency, like a job loss or death in your immediate family, not a Disney cruise or a new garage door.

Savings buckets can fit any large expense. For example, you can have a bucket for medical expenses (assuming you don’t have a Health Savings Account, which basically functions like a savings bucket) or a car purchase (even if you don’t pay all cash for your new vehicle, having some savings will lower your car payment and reduce interest costs). You can have a savings bucket for virtually any large, irregular expense, like if you enjoy buying the latest tech gear like an Apple Watch or a new laptop every couple of years.

Having a plan for how to make large, irregular purchases isn’t hard to do, but it takes upfront planning and a longer-term view of your cash flow. You need discipline to set money aside this way, but doing so will help you avoid blowing up your monthly budget and costly consumer debt. It will also give you an increased feeling of financial freedom as you begin to realize that large purchases aren’t derailing your financial plans like they do for most people.