Full Answer
What are some examples of periodic expenses?
- Home office space (as long as this is your main place of business)
- Mortgage interest
- Security system
- Property taxes
- Maintenance, repairs or upkeep
- Business Phone line (separate from home line)
- Insurance
What is the definition of flexible expenses?
In personal budgeting, a flexible expense is a non-essential expense that can be cut back or eliminated. Flexible expenses stand in contrast to fixed expenses, also known as inflexible expenses. Even inflexible expenses can contain flexible components, such as choosing more affordable substitutes.
What are periodic fixed expenses?
What Are Periodic Fixed Expenses? Periodic expenses are those costs that are the same and repeat regularly but don't occur every month (e.g., quarterly). They require planning ahead and budgeting money to pay periodically when the expenses are due.
Which expense is considered a fixed expense?
Some of the most common fixed expense samples include:
- Rent or mortgage payments
- Renter’s insurance or homeowner’s insurance
- Cell phone service
- Internet service
- Health, disability or life insurance premiums
- Property taxes
- Childcare expenses
- Student loan or car loan payments
What Is a Flexible Expense?
How to manage flexible expenses?
What are some examples of inflexible expenses?
Is flexible expense recurring?
Can inflexible expenses contain flexible components?
See 2 more
About this website
What is a flexible expense and a periodic expense?
Variable expenses, like food and groceries, can vary month-to-month, and generally aren't due on a set date. Periodic expenses include expenses that are billed quarterly or annually, as well as expenses like vehicle maintenance that come up now and then. Let's talk about each of these types of expenses in turn.
What is a periodic expense example?
Periodic Expenses are items such as insurance or vehicle registration which may be paid annually or quarterly instead of monthly. It is important to set money aside for periodic expenses and unplanned emergencies.
What is the difference between flexible and fixed expenses?
There are two major types of expenses: fixed and flexible. Flexible expenses are controllable costs that vary from week to week or month to month. Cutting costs by adjusting flexible expenses is easier than cutting fixed expenses, as fixed expenses remain constant, typically based on contractual agreements.
What is an example of a flexible expense?
Even the cost of utilities such as electricity may be considered a flexible expense. Turning off unused lights and appliances, using less powerful light bulbs, and hanging laundry out to dry instead of using a dryer are ways to reduce power consumption and household costs.
What are 3 types of expenses?
3 Main Types of ExpensesFixed expenses. Fixed expenses are the easiest to budget for. Because they are fixed, they are easy to predict. ... Periodic expenses. Periodic expenses are similar to fixed expenses. ... Variable expenses. As the name suggests, variable expenses can fluctuate a lot.
What is a period expense?
Period costs are costs that cannot be capitalized on a company's balance sheet. In other words, they are expensed in the period incurred and appear on the income statement. Period costs are also called period expenses.
Which is not a flexible expense?
An inflexible cost is an expense that does not change within a relevant range. For an individual, inflexible costs include car payments, mortgages, fixed loan payments, and installment plan payments on credit cards. For a company, inflexible costs include rent, insurance, leases, and salaries.
Is rent a flexible expense?
Fixed expenses, such as rent, stay the same from month to month. Variable expenses are ones that can change, such as gas or food.
What is an example of a fixed expense?
Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.
Is a car payment a flexible expense?
What Are Fixed Expenses? Typical fixed expenses include car payments, mortgage or rent payments, insurance premiums and real estate taxes. Typically, these expenses can't be easily changed. On the plus side, they're easy to budget for because they generally stay the same and are paid on a regular basis.
How do flexible expenses differ from fixed expenses quizlet?
Fixed: expenses that are the same every month. EX: car payment. Flexible: expenses that can change from month to month.
Which of the following is considered to be a flexible expenditure?
Grocery shopping is an example of a flexible expense. Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis.
How do you budget a periodic expense?
How to Budget for Periodic ExpensesTake a look at what you spent last year on periodic expenses. ... Add up what you spent last year in each of those categories. ... Divide the annual amount for each periodic expense category by 12. ... Set aside that money in the corresponding category each month, and don't touch it!
What expenses can change from month to month?
Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).
What are examples of fixed expenses?
Examples of fixed expenses include:Rent or mortgage payments.Car payments.Other loan payments.Insurance premiums.Property taxes.Phone and utility bills.Child care costs.Tuition fees.More items...•
Which car expense would not be periodic and variable?
Fixed Expenses. Fixed expenses are the easiest type of expense for which to prepare, because they come in at both a consistent interval and amount. For example, expenses like your rent or mortgage, your car insurance, and your internet bill are fixed.
Is food a fixed expense?
Food is not a fixed expense whether you mean groceries, meals out, or both. Your food spending will vary every month. Fixed expenses don't fluctuat...
Is a cell phone bill a fixed expense?
Fixed expenses don't change month to month. A cell phone bill is a fixed expense for many people, but if you sometimes call long distance or pay ov...
Should I convert periodic expenses to monthly averages?
Yes, you should convert periodic expenses to monthly averages. Dividing the annual amount of a periodic expense by 12 and setting that amount aside...
Is a flexible expense the same as a periodic expense?
Flexible expenses and periodic expenses are not the same. A flexible expense can be changed or cut from your budget by changing your spending habit...
What is a periodic fixed expense?
Fixed expenses are expenses like rent or mortgage payments that are the same amount each month. Periodic fixed expenses aren't billed monthly. They...
What would be considered a variable expense?
Variable expenses are expenditures that are different every month. Variable expenses are often discretionary, but not always. For example, dining o...
Is entertainment a variable expense?
Entertainment is a variable expense. You can't be sure exactly how much you'll spend on entertainment every month. Your entertainment expenses also...
What Is the Difference Between Fixed Expenses & Flexible ... - sapling
The difference between fixed expenses and flexible expenses is that fixed ones don't change over time and flexible expenses can change from month to month. Flexible expenses may only occur during certain times of the year. Individuals and companies have fixed and flexible expenses.
What are Flexible Expenses? (with pictures) - Smart Capital Mind
Some debts involve a combination of fixed and flexible expenses. This is true with many credit card accounts. The debtor is expected to pay a minimum amount each month, with that amount determined by the lender, not the debtor.
Flexible Expense financial definition of Flexible Expense
This section stresses good management planning by showing how budgets for all areas in an entity are linked together, how sample budgeting formats for numerous organizational areas interact with pertinent statistical measures, how flexible expense budgeting can best be used, how the budgeting process can be streamlined or modified to enhance the speed of its construction or updating, and how ...
Flexible expenses financial definition of Flexible expenses
Unnecessary expenses that may be foregone if necessary. Personal flexible expenses might include luxury goods and services such as those associated with a vacation. Business flexible expenses might include personal accounts used to take potential clients out to dinner.
Flexible Budget Vs Static Budget: Pros and Cons - PLANERGY Software
Flexible Budget Vs Static Budget: Pros and Cons. Businesses can use flexible budgets or static budgets. Many organizations opt to use both since static budgets are good for some things and flexible budgets are good for others.
What is periodic expense?
A periodic expense is a cost that appears irregularly rather than monthly. Examples include tuition, car registration, and annual membership fees. Periodic expenses are harder to budget for. They’re easy to forget, and they can vary widely.
What is a Fixed Expense?
For household budgeting, fixed expenses are predictable costs with amounts and due dates that don’t change. Fixed expenses will probably take up the largest percentage of your budget since rent, insurance, and car payments are fixed expenses. You often have limited control and a legal obligation to pay your fixed expenses.
What Are the 3 Types of Expenses in a Budget?
The three types of expenses in a budget are fixed, periodic, and variable . Fixed expenses are recurring expenses that don’t change and are usually paid monthly. Periodic expenses are less frequent (e.g. annually) and occur in predictable amounts. Variable expenses are often discretionary and can often be changed or eliminated by behavior.
What are Variable Expenses?
Variable expenses, also called flexible expenses, are expenses that fluctuate month to month. Many variable expenses are discretionary (such as entertainment, beauty products, and eating out), but some necessities (gas, groceries, and utilities) are also variable expenses.
How to reduce variable expenses?
Variable expenses can often be reduced or eliminated from your budget by changing your spending habits and making different choices. Here are some ways you can lower variable expenses: 1 Eat at Home More Often 2 Slash Your Grocery Spending 3 Save on Utility Bills 4 Do a No Spend Challenge
How can variable expenses be reduced?
Variable expenses can often be reduced or eliminated from your budget by changing your spending habits and making different choices. Here are some ways you can lower variable expenses:
Why is it important to have periodic expenses in your budget?
You don’t want to get hit with a big annual bill , then panic and scramble to come up with the money. Being unprepared to cover financial obligations is how some people get trapped in a cycle of debt. That’s why it’s extremely important to account for all periodic expenses in your budget.
What is fixed expense?
Fixed Expenses. Fixed expenses are the easiest type of expense for which to prepare, because they come in at both a consistent interval and amount. For example, expenses like your rent or mortgage, your car insurance, and your internet bill are fixed. Sure, they may vary by a few dollars from one month to the next, but for the most part, ...
How to budget for fixed expenses?
The easiest way to budget for fixed expenses, is to start each month with a copy of the previous month’s budget. That way, none of your fixed expenses will fall through the cracks.
What are the different types of expenses?
The more you understand these 3 types of expenses, the better you can financially prepare for them. To review: 1 Fixed Expenses occur in predictable amounts and intervals. In most cases, they occur on a monthly basis. 2 Periodic Expenses are similar to fixed expenses, but they occur much less frequently. (i.e. quarterly or annually) 3 Variable Expenses can be influenced by your financial behavior and decision-making. Additionally, they can be divided into 2 sub-categories: necessary or discretionary.
What is discretionary expense?
The discretionary portion of variable expenses are things like recreational spending. For example, buying a new pair of shoes that you didn’t technically ‘need’, would be considered a variable, discretionary expense.
What is the easiest expense to control?
Variable expenses are the easiest to control when it comes to your financial life. You just have to make a conscious choice to do so.
What are the two categories of variable expenses?
Variable Expenses. You can break variable expenses into two sub-categories: necessary and discretionary. The necessary portion of variable expenses are things like gas for your car, your electric bill, and your monthly food budget.
What happens when you reduce your fixed expenses?
When you reduce your fixed expenses, you are decreasing your monthly cost of living.
What Is a Flexible Expense?
A flexible expense is a discretionary purchase that can be altered or eliminated without a significant downside. These are non-essential expenses that stand in contrast to fixed expenses. Flexible expenses should be included in a budget to manage an individual's overall finances. Economists often use the term consumer discretionary spending to describe flexible expenses.
How to manage flexible expenses?
The first step in managing flexible expenses is to discover what they are. One can go over their checking account and credit card statements to see what they spend their money on over a month. They can break the categories down into flexible and inflexible expenses and start noting what the flexible expenses are.
What are some examples of inflexible expenses?
Even some apparently inflexible costs, like groceries, may include flexible components, like pre-cooked entrees or the most expensive cuts of beef. There are always more affordable options to inflexible expenses, such as purchasing a Ford instead of a BMW.
Is flexible expense recurring?
Though a flexible expense may be recurring, the amount spent and the decision to incur the expense are still matters of choice . For example, if a household elects to order a cable or satellite television service, the cost recurs monthly. The expense may be reduced by opting for a plan with fewer premium channels.
Can inflexible expenses contain flexible components?
Even inflexible expenses can contain flexible components, such as choosing more affordable substitutes.
