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Learn What to do With Unfixed Expenses

Learn What to do With Unfixed Expenses

Budgeting is profitable if you intend to manage your finances. A budget is necessary to prevent debt or losing property or credit. Having an appropriate budget prevents these mishaps while putting some money in your account. However, your budget is favored by the amount of income received. There are many online worksheet tools available to help prepare a budget. These methods require you to list your income and expenses to clarify if you can save after expenses.

There are two types of expenses – fixed and non-fixed/unfixed expenses. You pay for some things monthly, referred to as fixed expenses, such as a mortgage or car payment. At the same time, non-fixed or unfixed expenses change each month.    

This article will focus on unfixed or non-fixed expenses and how to avoid damaging your budget with these variables. Unfixed expenses are challenging to control because they can be your needs or wants, like fast food and new CDs. This category makes it frustrating to have a burger after a week of hard work to avoid tarnishing your prepared budget. But a budget is not always about avoiding what is necessary. Here are the common types of unfixed expenses. 

  • Direct materials

  • Direct labor

  • Transaction fees

  • Commissions

  • Utility costs

  • Billable labor

Note; that an unfixed cost varies and is determined by the activity level.


Analyzing UnFixed Expenses

It would be best if you listed out your expenses and analyzed them, which will make a difference in budgeting. The process can be overwhelming and time-consuming to get a definite amount. But having analyzed your budget, you can easily manage the list, making it easy for you to sleep and feel confident about spending and the future. So, here are some things to do on the unfixed expenses.


Necessary versus Unnecessary: the listing should be divided into essential and unnecessary expenses before budgeting. The necessary expenses are things you can't do without, meaning your life will be detrimental without these expenses. However, you can circle expenses that you're confused about their use and move on. 

As you start budgeting, you can easily determine which expenses you can live without. During the budget, make it necessary to eliminate unnecessary expenses to see the outcome. After a month, you can keep cutting such costs if you can do without them. However, some expenses are small but accumulate with time, but others, like hospital bills, are large and unexpected. You can avoid these problems by reserving a 10% monthly savings for emergencies. 


Recurring versus One-Time Expense: check all the listings for previous months and consider expenses that reoccur each time on your budget. For instance, you may face a flat tire resulting in a one-time expense or new trousers bought for work. You cannot avoid this group of expenses on your budget. But having a new shirt monthly is a recurring expense you can cut out without affecting you. 


Make Decisions: make decisions according to the budget you've made. This last strategy should include every member of the household to avoid leaks in the budget. You can eliminate some unnecessary trips or vacations made each month. Or, you can check if joining a club can reduce expenses rather than paying public fees each time. 

Remember that everyone has indulgences, so be careful in cutting out expenses for a family member. The decisions should be favorable to each family member but, above all, should have a room reduction in expenditures to encourage savings each month.

As you make your budget for unfixed expenses, ensure your account has some savings in case of emergencies like medical bills and accidents. Remove some wants and, if possible, neglect some needs.


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Dennis Jao
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