Understanding different types of expenses will help you build your budget.
Your expenses can be divided into one of three categories:
Fixed expenses – these usually do not fluctuate and require a set payment on a weekly or monthly basis. Examples of these are: mortgage payment, insurance, car payment, and child support.
Variable expenses – these vary from week to week or month to month. They are the most flexible. Examples of these are: food, utilities, cable, gas, clothing, recreation, hobbies, etc.
Periodic expenses – these generally occur once or twice a year. They include items such as Christmas gifts, car registration, and back-to-school expenses.
Savings and debt payments will also be included in your budget.