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Variable monthly expenses9/3/2023 ![]() Suppose the table below shows your family's monthly expenses by category Fixed or Average Percent of Expense Variable Monthly Yearly Cost Yearly Budget Expense? Cost (Rounded) 54,800 Fixed S4oo S4,800 9.8% Income Tax 548,900Ĭlothing Transportation Insurance MedicalĪ) Fixed expenses are expenses (hat do not charipa ior month to month, and variable expenses are expenses that can fluctuate from month % meriaa. Step 2: Calculating Monthly Expenses The second step to bullding family budget Is t0 Oulline your expenses in greater detail iterizing fixed and variable expenses. We can also help with free Credit Counseling, which includes a personalized budget and action plan.A) fixed expenses are expenses that do not change from month to month ,and variable expenses are expenses that can fluctuate from month to month.Complete the second column of the chart by determining if each experience is fixed or variable.Ĭhoose an example of fixed expenses and an example of variable expense and explain why they are classified that way. If you need additional help planning for fixed, variable and periodic expenses, our Living Expenses Calculator is a great tool. If you don’t have an emergency savings account yet, this should inspire you to start one. In the case of truly unexpected expenses, such as a major car repair, an emergency savings account can keep you from having to charge it to a credit card. For example, set a designated amount to spend on holiday gifts in January, divide the amount by 12, and set aside that amount each month in a savings account dedicated for just that purpose. For things you know are going to come up at least once a year, set aside a little bit each month to cover the cost. Periodic expenses include things like annual vehicle registration, major car repairs, and holiday gift giving. These are the hardest expenses to plan for and the ones most likely to take you by surprise. These plans average your usage over time and charge the same each month, rather than spiking during times of increased usage (think summer AC bills in hot climates). Utilities can become a fixed expense if your service provider offers an “equalizer” plan. By keeping track of these expenses over time, you can get a better idea of how much you’re spending each month and plan accordingly. Variable expenses include such things as groceries, gas for your vehicle, utilities, entertainment expenses, and clothing. ![]() Just as the name says, these are your expenses that will vary month-to-month and are probably the largest spending category. They may vary slightly from year-to-year (say, a rent increase) but overall you can count on them to stay the same for at least a year at a time. Your mortgage or rent, car payment, and insurance are examples of fixed expenses. These are the expenses you have that don’t change month-to-month. Knowing what types of expenses you have and how to plan for them can help you manage your money more effectively and get off the paycheck-to-paycheck merry-go-round. One of the most important parts of planning and sticking to your budget is understanding the differences between fixed, variable and periodic expenses.
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