But budgeting for monthly payments like rent and utility bills is quite simple since you always have a budget for them. For example, you might forget to budget back-to-school supplies for your children or other things like car maintenance or holiday spending. Plus, they often take most people by surprise. Because they occur irregularly, these expenditures are the most difficult to plan for.

They can be on schedule (I.e., Dec 15th each year), or they can come up randomly. Periodic expenses happen once in a while. If you consistently maintain that savings habit, it qualifies as a fixed expense. For example, you may put aside $150 into your savings account from your monthly salary. This applies if you set aside a specific amount every month. Depending on your monthly usage, you may even predict your next month’s utility bill.Īnother fixed expense that is unknown to many is savings. This is because you get your utility bills monthly and always know the due date. Here are some of the common examples of fixed payments:Įven though utility payments may change from one month to another, they are still classified under fixed expenses. For this reason, you can easily apply specific budgeting techniques like the 50/20/30 budget or zero-based budgeting. This is because the expenses remain more or less the same. Your budgeting process becomes more accessible and more predictable. This is because they’re paid in similar amounts at recurrent monthly intervals and take up the lion’s share of your budget.įrom a planning standpoint, the more fixed expenses you have, the better. For example, your landlord might raise your rental fees, or you might choose to switch to a new internet service provider.įixed expenses should be the first thing to include in your budget. And the amounts are predictable because you always know how much you’re expected to pay.įixed expenses may change occasionally, but the change does not occur regularly. You also have little or no control over your fixed costs. It doesn’t fluctuate, meaning you don’t have to take a wild guess on your next month’s fixed expenses.

Fixed Expenses DefinitionĪs the name implies, a fixed expense is that which remains constant and predictable over time.

Aside from periodic expenses, you must also understand how fixed and flexible, or variable expenses affect your budget. Types of Expenses in a BudgetĪn expense is an amount you part with for products and services you use daily. Periodic expenses typically occur irregularly instead of every month. Then again, you won’t get the best outcomes if you don’t factor in periodic expenses when creating a budget. This is true because you’re likely to overspend if you don’t have a budget. Financial experts advise people to create budget expenditures in line with their goals.

Flexible expenses examples list