Budget Wizard

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Section: Expenses

Expenses can be classified into three types: fixed, variable and periodic.

  • Fixed expenses cost the same every time — often a set monthly payment. These are easy to plan for because you know how much needs to be paid and when. The downside is that the amount is set by someone else, so you can’t adjust your payments if money is tight.
  • Variable expenses are common payments where the amount is different each time, such as buying groceries or gas. The advantage is that you control how much you spend. For example, you can change how often you dine out and where you go.
  • Periodic expenses arise occasionally during the year, usually less than once a month. Examples include school fees, trip expenses and insurance. It is good practice to estimate an average amount to set aside each month to cover these periodic payments.