That’s why most people end up overspending on flexible expenses than what they had intended without even noticing. You may, for example, need to collect all your grocery receipts to learn exactly how much you spend on food supplies every month. Opting to watch a movie at home with homemade snacks instead would save you money.ĭue to their unpredictable nature, variable expenses are often a hard nut to crack in terms of tracking and budgeting. While watching a movie is entertaining, it is not a must. Take the case of a person who usually goes to the movies and likes to buy soda and sandwiches, for example. Wants include items like new clothing, eating out, and leisure activities. Necessary variable expenses comprise items like groceries and electricity. This means you can tailor them to fit within your budget. In contrast to fixed expenses, variable expenses afford more control over the payments you make. They are regularly occurring expenses that change every now and then. You can use the terms “variable expenses” and “flexible expenses” interchangeably. You can avoid this issue by identifying your annual, biannual, or quarterly periodic expenses and dividing them into monthly averages.Īpart from periodic expenses, what other expenses should form part of your budget? Read on to find out. But budgeting for monthly expenses like rent and utility bills is quite simple since you always have a budget for them. For example, you might forget to budget for back-to-school supplies for your children or other things like car maintenance or holiday spending. Plus, they often take most people by surprise. Because they occur irregularly, these expenses are the most difficult to plan for. Dec 15th each year), or they can come up at random. Periodic expenses happen once in a while. If you consistently maintain that savings habit, it qualifies as a fixed expense. For example, you may put aside $150 into your savings account from your monthly salary. This applies if you set aside a specific amount every month. You may even predict your next month’s utility bill depending on your usage throughout the month.Īnother fixed expense that is unknown to many is the saving expense. This is because you get your utility bills at the same time every month and always know the due date. Here are some of the common examples of fixed payments:Įven though utility payments may change from one month to another, they are still classified under fixed expenses.
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