How to Make a Budget – Variable Expenses
Nov 26, 2008 by JimA variable expense fluctuates and is not usually a monthly expense, but comes often at unforeseen times and can stress your monthly budget. People often end up putting variable expenses on credit cards which can get them into trouble when they start piling up. Variable expenses include clothing, visits to the doctor or dentist, automobile maintenance, vacations, gifts for friends or family, and so on. These types of expenses can be difficult to get a handle on.
Here is a practical way to approach budgeting your variable expenses. Estimate what you might spend in a year for each variable category, add them up, then average that amount over 12 months. Let’s say your variable expenses average out to $300 per month. Begin setting aside this amount each month because you may have several good months with very low expenses and then get hit hard at Christmas or in the summer.
Second, you will have to set priorities. If you find out your car needs new brakes and that eats up your $300 variable expense budget for this month, then put off buying clothes or a making a trip till you have a chance to recover and build up your variable expense reserves again.
When you get to the end of a year, look at all your variable expenses and see how close you were with your budget. If necessary, adjust the amount you set aside for variable expenses and put off the things that are not as important.
There are free budgeting spreadsheets and software that have all 12 months of the year included. If you prefer this method, you can write in amounts for expenses that come in different months. Choose the method that suits you best.