Flexible expenses from month to month how to#

On the other hand, your gas bill might be negligible during the summer but a killer in the winter.

Maybe your electricity bill runs low from September to May but shoots up from June to August when it’s hot out. So, it’s a good idea to see if you can convert a flexible expense into a fixed expense.Īn obvious example of this is your utility bills, which probably fluctuate depending on the season, making them tricky to budget. Convert Flexible Expenses to FixedĪll other things being equal, the fewer flexible expenses you have, the easier it will be to manage your money. Using an app like Goodbudget, you can still allocate your money to “envelopes” for your expenses each month. Obviously, these days it doesn’t make much sense to have a bunch of cash-stuffed envelopes to keep track of, but that doesn’t mean you can’t still follow the system in spirit. You do this for every budgeted expense, and then you’re guaranteed not to overspend – at least not by accident. Each month, you would put $150 cash in an envelope marked “dining out” and when it’s spent, that’s it. Let’s say your monthly budget for dining out is $150.

It’s been around a while, and it’s very simple. One budgeting trick that many people favor for their fluctuating costs is called the envelope system. Most of the time, we just aren’t paying that close attention to what we’re spending, especially if it’s something mundane and frequent like groceries. We’ve already seen that overspending is pretty common even if you use a budget. Look past the obvious – everyone has heard some variation of the “skip your fancy coffee” or “pack your lunch” routine, but how often do you go to the barber or salon? How often do you get your car washed? Are you paying someone to do something that you could probably be doing yourself? Some comforts may be hard to part with, but it can pay off big in the long-term. 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.

Flexible expenses from month to month 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.