For my usual irregular expenses like car insurance, tag renewal and my condo policy, I usually just use a credit card to pay them and pay off the card over time. Beginning this year, I took the total of my irregular expenses plus a buffer and divided it by 12. I now put that amount out of each paycheck aside in my Etrade savings account (currently at 5.05%). To date, I have saved about $1100...enough for my next 6 month auto insurance policy (about $450), my condo policy ($375) and a small buffer for any other unexpected irregular expenses. Granted, I have about $38k in cash but that is reserved for paying off my credit card debt and paying off my car loan.
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I've tried to start doing this as well. My 6-month auto insurance policy renewal is coming up next month...who do you use for your insurance company? I've been with 21st Century for a while and like them, but your rate seems really low.