You can use a tool like Mint or YNAB to track your spending automatically, or take a simple pen-and-paper approach. If you’re not actively budgeting, you may wish to start tracking your expenses for a few months. To prepare for these expenses, a smart strategy is to find your average spending per month in these categories. Required variable expensesĮxpenses like groceries, utility bills and gas are required, but the amount you spend on them changes every month. There are a couple of different types of variable expenses, and the strategies for budgeting for them differ a bit. On the other hand, travel is a variable expense - but in many cases, travel is discretionary. Variable expenses can be discretionary - but they can also be necessary.įor instance, your heating bill is a variable expense (it’s likely higher in the winter than the summer), but it wouldn’t be considered discretionary. There is another type of expense category that’s referred to as “discretionary expenses.” These are “optional” purchases, such as entertainment and restaurants. Variable does not necessarily mean discretionary Variable expenses examplesĪny expense that varies from month to month could be considered a variable expense. Importantly, variable expenses can be essential, like utility bills - or completely optional, like restaurant takeout. Other expenses may change once every year or two (like rent), but these would still be considered fixed expenses since they’re the same every month. The variable expenses definition includes any expense category that may change frequently. Or, a day-to-day expense, like your lunch purchase at work. Variable expenses are expenses that change over time.Ī variable expense could be an expense that changes month-to-month, like your heating bill. This guide shows you how to calculate variable expenses in your budget and covers everything there is to know about these frequently changing expense categories. How do you prepare for an expense category that’s different month-to-month? Precisely because they change, it can be difficult to budget for variable expenses. What are variable expenses, exactly? Essentially, these expenses are costs or spending categories that change over time. When it comes to creating a budget, there are two broad types of expenses: Fixed expenses, like rent or mortgage payments, and variable expenses, like food and travel.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |