Now, you just have to remember to budget the new amount for next month! (That can happen if your insurance has an annual renewal, for example, or if your rent goes up.) If that happens, you’ll need to adjust your line item and make up the difference somewhere else in your budget. Make sure those fixed costs don’t end up changing when it comes time to pay the bill. EveryDollar will automatically copy it over for the next month.Īnd don’t forget: The key to successful budgeting is tracking your expenses. For your fixed expenses, all you have to do is make a line item with the name (like Rent) and amount ($1,200). Want to try it out? Download EveryDollar and set up your own zero-based budget. Each one of those bills gets its own line in your budget. Part of that zero-based budget includes those fixed costs that happen month after month. That doesn’t mean you have zero in your bank account-it just means you’ve accounted for every single dollar of your paycheck and told it where to go. It’s when your income minus your expenses equals zero. A zero-based budget sounds a little scary, but stick with us. Let’s talk about fixed expenses from a zero-based budgeting perspective. (And all the free spirits out there say, “Amen!”) Around here, we love fixed costs because they make budgeting that much easier. So, when you’re creating your monthly budget, these expenses are probably going to stay the same (as long as you haven’t moved across the country or bought a house). We’re talking about your mortgage or rent payments, gym membership, life insurance, medical insurance or even streaming service costs (Netflix, Disney+ or Hulu). We’re going to walk you through everything you need to know about managing your money with fixed expenses and variable expenses (and what the heck they have to do with budgeting).įixed expenses are the items in your budget that stay the same month after month. Believe it or not, you already know what fixed and variable expenses are-even if you didn’t know what they’re called. And trust us, it’s definitely not as intimidating (or boring) as it sounds. Budgeting isn’t just for personal finance nerds or accountants. While those money terms sound like you just bought a one-way ticket to snooze fest, stick with us. No matter what your financial situation is, doing a regular budget and keeping track of your fixed and variable expenses will help you create the life you want to live.ĭid we just say fixed and variable expenses? Yep.
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