![]() Investment expenses can include things like investments, savings, and retirement accounts. Investment expenses are expenses related to long-term goals, such as saving for retirement or buying a bungalow. Within each category, there are several different types of flexible expenses.įor example, discretionary expenses include entertainment, gifts, and travel.Įssential expenses can include rent, utilities, and car payments. Actual expenses are things like rent or utilities that are necessary for basic living. Discretionary expenses are things like entertainment, vacations, and dining out. Types of flexible expensesįlexible expenses can be divided into three main categories: discretionary, essential, and investment. They occur regularly and take up a more significant portion of your budget. On the other hand, periodic expenses are more fixed and consistent. For example, you spend more on groceries in one month and less in another. A flexible expense can be something like groceries or eating out, while a periodic expense is a set cost that you pay on a regular basis, like a monthly rent payment or car insurance.įlexible expenses can vary monthly, depending on your income and needs. Flexible expenses are more fluid and open to change, while regular expenses are fixed and recurring. When it comes to budgeting, it’s important to understand the differences between flexible and periodic expenses. ![]() Differences between a flexible expense and a periodic expense Understanding the differences between these two types of expenses can improve your budgeting and financial planning. Flexible expenses, also known as variable expenses, are different from periodic expenses, which are set costs that occur at regular intervals. $128.34 future expenses $119.What is a Flexible Expense? A flexible expense is a cost that can vary from month to month, depending on your income and needs. $83.75 future expenses $164.25 emergency fund d. ![]() $248 future expenses $0 emergency fund c. $75 future expenses $173 emergency fund b. How much will be left over each month that can be deposited into a general emergency fund? a. How can he divide these future expenses into a monthly deposit that can be added to his monthly budget. He has decided to make an automatic monthly transfer from his checking account to his savings accounts to cover these other predictable expenses. He has decided to add monthly savings to his budget in order to cover his health insurance co-pays and other expenses that come at odd times as listed below: Predictable Expense Amount Medical exams, lab co-pays, health insurance co-pays $640 every year Auto maintenance $35 per quarter Auto registration $225 per year If Rogério leaves the cash flow in the checking account for all needs that arise, he runs the risk of not having the money for these very important future expenses. Rogério, a graphic artist, after paying all the expenses in his monthly budget, has a monthly net cash flow of $248. Explain how Sammy calculated his total amount deposited. If there were not enough, he would decrease one or all of the deposits. If there were any extra, then he would increase one or all of the deposits. Total $2362 Sammy has included a total row to help make sure that his paycheck can be divided to make deposits into these 4 accounts. Other (long-term) 5 years Vacation savings $50 Vacation. Other (unpredictable) Annual Emergency savings $210 Non-insured healthcare, repairs, and income replacement. Other (predictable) Annual Emergency savings $130 Health exams, clothing, food, baseball coach magazine. ![]() ![]() Non-essential Monthly Cash $260 Snack items, restaurants, gifts, movies. He is making a budget, and has made the following chart in order to divide his monthly paycheck into his accounts: Expense type Frequency Account Monthly amount Items Essential (fixed) Monthly Checking $1292 Rent, car, insurance Essential (variable) Monthly Checking $420 Basic groceries, telephone, electricity, cable TV, batting practice. Sammy makes $2362/month as a baseball coach. ![]()
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