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Fixed vs. Variable Expenses

I’d like to talk to you about fixed vs. variable expenses. We all have expenses each month. Things we know we have to pay for like maybe rent or a mortgage. You also probably have a cell phone bill and maybe a car payment, too. These types of expenses are fixed because the amount you spend on them stays the same each month and there is a due date. But we also spend our money on other things that fluctuate in price like eating out, groceries, and gas. These things can cost you more some months and less other months and are considered variable. Both types of expenses make up your budget each month and need to be tracked if you want to meet your financial goals. If you’re struggling to pay your bills or if there’s hardly anything left over each month, there’s definitely room in both of these expense categories to “trim the fat” and free up some much-needed money.


Just because one of your bills is a fixed amount each month doesn’t mean that it can’t be reduced. Let’s use your car insurance as an example. This bill can be reduced by shopping around for a cheaper rate or raising your deductible. You could also pay for your car insurance in full every six months instead of monthly payments to save even more. Fixed expenses can also be deleted from your budget if things are tight. For example, you could cancel Netflix or your gym membership if you need to make some room in your budget. Sometimes a fixed expense can be reduced by calling and asking for a better rate. If you’re not afraid to ask, call and ask for a cheaper plan for your cell phone or a lower interest rate on your credit card.



Variable expenses are a little tricky to budget since they change each month. You can’t control the price of gas or groceries, so it can feel like you might not be able to save as much in these categories. That is not the case at all, so let’s go ahead and see what can be done. The first thing you need to do is figure out your spending habits. Tracking your spending is a great first step in reducing your spending. As I mentioned last time when we talked about how to make a budget, printing out your last few bank statements is a quick and easy way to see where your money is going. Then, once you know, you can decide which variable expenses need to be reduced. Spending too much money eating out? Start meal planning and stock your pantry so you have quick and easy meals ready to prepare at home. Pack your lunch and make your coffee at home to avoid those tempting drive-thrus. Spending too much at the grocery store? Take advantage of BOGO offers. You can also clip coupons, buy items that are on sale that week, and choose generic over name brands. One easy way to save money at the grocery store is to make a list of items you need and do a grocery pick-up order. This eliminates impulse buys and helps you stick to your budget.


Variable expenses aren’t as easy to predict as fixed expenses, but don’t let that stop you from taking control of your spending. Determine which expenses in your budget are fixed and variable so you can find ways to cut back and save money.


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