There are both flexible and inflexible or fixed expenses. An optional expense that can be changed or canceled without a major drawback is referred to as a flexible expense. They are often seen as non-essential costs.
To help manage your money, you should look into your flexible spending to see where changes can be made to save yourself money. But what is a flexible expense exactly? In this article, we will go into more detail about what a flexible expense is and what you need to be aware of.
What Is A Flexible Expense?
Usually, a flexible expense is a type of cost which is constantly recurring, with the amount that could change from month to month. Flexible expenses, as opposed to fixed costs, provide you more control over your spending.
Costs you incur that vary between each week or month to month are referred to as flexible expenses or variable expenses Some expenses are flexible, meaning the overall cost of these changes frequently. While others are set, meaning payments you make on a regular basis that remain the same from month to month.
Your monthly payments for groceries, clothes, and transportation are a few instances of flexible expenses. This is because the overall cost of each of these items is likely to vary from month to month.
How Do They Work?
It’s likely that you are aware of your monthly income. Knowing how much money you’re spending and what you’re spending it on is equally important. Every budget should, in general, include both flexible and fixed spending.
Your daily, weekly, or monthly adjustable expenses are referred to as flexible expenses. They fall into two categories: needs and wants. The list of necessary flexible spending also includes items like groceries and energy.
However, flexible costs that are deemed desires or discretionary include items like entertainment, new clothes, and recreational activities. Imagine you frequently go to the movies and always buy popcorn. You don’t have to do this, but you might want to.
You might save money by opting not to go to the theaters and instead watching a movie at home alongside homemade popcorn. As both of these purchases are optional and flexible.
Different Types Of Flexible Expenses
It is possible to save money on flexible expenses. Yet, you might need to examine your spending carefully and alter your way of living. Additionally, when you are conscious of your spending patterns, you might look for ways to temporarily reduce or even eliminate some of these expenses.
Below are some of the most popular flexible expenses that most people come across. It is with these that you can change your habits and possibly cut down on your flexible spending to save yourself more money.
In 2020, the average American household spent $7,316 on food total. This included both in-home and out-of-home meals. Making eating out less of a priority will help you control your food costs. This is because, on average, restaurant meals are more expensive than buying groceries.
Thus, you can save a lot more money by cooking at home. The money you save from not eating out can go towards your groceries to buy better food. Or it can be used to fund another bill.
Admission and taxes for entertainment decreased from $880 in 2019, down to $425 in 2020. Spending in this category is completely under your control because entertainment expenses are only wanted, they aren’t a need.
Additionally, while looking for strategies to cut back on your expenses, they are the simplest to eliminate or reduce. You don’t always need to go for the top plan with all features. In addition to that, if you don’t use a particular entertainment package much, then really it is a waste of money. So you should get rid of it or go to a cheaper plan if possible.
In contrast to almost $2,094 in 2019, consumers paid $1,568 on gasoline on average in 2020. If possible, try using alternate, less costly forms of transport when traveling instead of driving. This can include walking or biking, to reduce the expense of gasoline, specifically.
However, if you are traveling a longer distance, you don’t need to just drive, there is also public transportation that you can use. Yet, in this case, you need to weigh up which one will save you money over time. This will depend on how often you intend to travel using this mode of transport.
Electricity may be seen as a necessity, yet you can still control how much you use. Being aware of when you put the lights on or instead using a dryer, you hang your washing outside to dry. These things can reduce your electricity bill, helping you to save money. As your electricity bill can differ month to month, it is seen as a form of flexible expense, which you can control.
Flexible expenses are the expenses you may easily reduce when money is tight to lessen the impact on your finances. People are frequently shocked by how much they spend on unnecessary items when they begin tracking their purchases for the first time.
Controlling your flexible spending makes it simpler to meet your fixed costs, prevent late fees, and reach your financial objectives. We hope this article has helped you to discover what a flexible expense is.
Frequently Asked Questions
Is Rent A Flexible Expense?
Rent is a fixed expense, as it doesn’t change from month to month. While gas, water, or electric bills are flexible as they change monthly.
What Is Flexible Spending Credit?
A flexible spending credit card is a type of credit card which permits the cardholder to exceed their credit limit without incurring fees. This is as long as the transaction satisfies specific requirements, which are often dependent on the user’s income, credit history, and spending patterns.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.