Variable Expenses - Backcourt Defense

Reviewing variable expenses will be the most time consuming portion of your research.

These expenses over which you have the most control. This is money spent based on lifestyle choices and family needs. Other than food, clothing and transportation, most of these categories are voluntary. Variable expense items are usually "wants" and not necessarily "needs".

With the possible exception of housing (you may want to own the largest home in your family or community) these expenses are spent based on your personal or family goals.

Start by listing the most obvious variable expense categories that apply to your family spending each month and then review your checking accounts, credit card and money order receipts for the past three months to see if there are any categories which you may have missed but which should be included.

Some that come to mind are:

  • Food
  • Transportation
  • Clothing
  • Entertainment
  • Kids
  • Gifts
  • Household items
  • Walking around money

Food is possibly your largest expense depending on the size of your family. Include all food purchases - do not limit this category to only food bought at the grocery store. Be sure to include meals eaten out, take out (take in, depending on where you live), lunches, your regular stops at the coffee shop, and don't forget those stops for fast food to appease the kids.

Transportationmay be competing for first place in largest expense category. Besides gas for your car your expenses may include transportation passes, tolls, and parking. You may want to include your auto lease or car payment as a variable expense since you can control the type of vehicle you drive.

Clothing may be a major category for some, for others not so much. If you have kids, this is a category you cannot ignore as this is a constant expense.

Entertainment is a modern day dilemma. What exactly is it? Some expenses such as going to the movies or a ballgame are easy to identify. Others like cable, satellite TV, and high speed internet are not. Is your cell phone entertainment or a utility?

You decide. It's your budget.

Kids are great. And expensive. Let's face it; if you have kids you are going to have expenses related to their activities. I'm not referring to clothing or food here. How about class trips or school projects, soccer or baseball, dance or violin lessons? How about birthday parties? Gifts for their friends' birthday parties? Holiday gifts? Kids are expensive!

You may be like most people in that you really enjoy giving gifts but find the process stressful rather than joyful. There are many ways to give gifts that do not necessarily mean spending lots money. It can also be helpful to remind kids that there are limits to what you can spend when you budget expenses.

Don't forget that everyone, no matter how frugal, has to budget variable expenses for household items. These can include everything from sheets for the beds to hinges for the doors. If you are a homeowner, you MUST include an expense category for this. There is more to supplying a home than purchasing paper towels and laundry soap. Every day something else seems to need repairs or replacement.

You may not have thought of walking around money as an expense, but we always spend money for things we didn't plan to buy. Everyone buys on impulse at least once in awhile. We stop for some tea or coffee, or buy something for ourselves or others that we just happen to come across. Don't ignore it, record it.


Budgeting variable expenses practice and exercise

  1. Determine these expenses and list them on your spreadsheet.
  2. Combine like expenses. Remember to keep it simple.
  3. Total your variable expenses for each month.
  4. Go to Step 3, Household Debt, to complete your review.

Move on to Household Debt.

No Debt, Move on to Making a Budget.

Go Back to Fixed Expenses from Variable Expenses

Go to Family Finance Coach home page