You’ll probably want to examine at least three to six months of costs – remember, these fluctuate, so one month may or may not be representative of your average spending over time.Ĭomb through your bank and credit card statements to assess whether each cost is a necessity or a luxury.
If you don’t know how much you’re spending on these expenses each month, it’s time to start digging into your past. Take Our Poll: What Are You Worth to Your Company? Dig Into Your Spending Historyīefore you can devise a plan to manage your flexible expenses, you have to identify them. If you’re consistently finding yourself in the hole despite having a budget to follow, consider reevaluating your plan to make sure you are managing (and minimizing) your flexible expenses. It’s fairly simple to get a handle on fixed expenses, but without careful planning, flexible expenses can easily wreck a budget and jeopardize your financial goals. Flexible expenses (often called variable expenses in accounting) are those that fluctuate month over month, like groceries, dining out, or entertainment.īoth types of expenses need to be accounted for. What Are Flexible Expenses?Įxpenses fall into two buckets, fixed and flexible.įixed expenses are those that typically stay the same month over month – your rent or mortgage, car payments, streaming services, and so on. It can be an easy trap to fall into, especially if you’re budgeting incorrectly for your flexible expenses. There’s a greater risk of overspending when people fail to budget, but even if you have one there’s no guarantee that you won’t spend too much. Ten years ago, only about 40% of Americans had a monthly budget, but according to a recent survey by, that number has increased to almost 86%. Most seem to be listening to that advice.
#Difference between fixed expenses and flexible expenses how to#
Next: How To Build Your Savings From Scratch Related: 9 Bills You Should Never Put on Autopay Just about every financial expert agrees that it’s important to have a budget and spending plan to track your monthly expenses and help you keep your financial goals within reach.
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