Creating A Budget With Periodic Expense That Takes Into Account Regular, Occasional, Purchases

One of the most important components of budgeting is distinguishing between expenditures that are constant, costs that are variable, and costs that are incurred on a periodic basis. If you understand the many expenses you incur and the measures you need take to prepare for them, you may be better able to manage your money and break free from the vicious cycle of living with periodic expenses.

Periodic Expenses for You

Monthly fixed expenses are those that you pay on a consistent basis. Mortgage or rent payments, auto payments, and insurance premiums are all examples of fixed expenses. You can count on them to stay the same for at least a year at a period, although they may undergo considerable changes (such as an increase in rent) between years.

Potentially Variable Costs

As the name implies, these are the prices that will vary from month to month, and they often account for the bulk of your regular monthly outlays. Expenses that fluctuate often include those for food, gas for your vehicle, electricity, water, cable, telephone, entertainment, and clothing. If you keep track of these prices over time, you may have a clearer idea of how much you spend each month and adjust your budget accordingly. Utilities might become a predictable monthly cost if your supplier offers a “equaliser” plan. The cost of these plans is determined based on an average of your use over time, so it does not spike during times of heavy demand (like summer AC costs in hot climates).

Argue for a raise in compensation with your employer

Have you lately been crushing it in your career? Depending on how long you’ve been with your company, you may want to consider asking for a raise as a guaranteed way to make more money.

The timing of your request is the single most important consideration when it comes to asking for a raise. Have there been any layoffs at your firm recently? Is it now experiencing an especially slow time of year? If you want to increase the likelihood of getting what you want, you need to be strategic about when you ask for it.

Another option is to submit a promotion application if you believe you are ready for more responsibility. You might think about setting up a meeting with your boss to demonstrate them that you’re ready for the next step in your career and that you’ve been successful so far (with examples).

Constant Expenditures

These are the expenses that are notoriously difficult to plan for and may easily throw off your financial plan. Annual car registration payments, oil changes, and a new set of holiday lights are just a few examples of recurring costs. Expenses that you know will occur at least once a year, such as insurance premiums, should be budgeted for on a monthly basis. For Christmas spending, for instance, you may determine in January how much you want to spend, do the math, divide by 12, and then set aside that amount each month in a savings account for the holidays.

Conclusion

Having an emergency savings account might help you avoid using a credit card when unexpected expenses come up, such when you need to pay for major vehicle repairs. If you haven’t already done so, this should encourage you to start setting money aside in case of emergencies.