Every month when I go to pay my electric bill, Im hit with a surprise.
Sometimes its a pleasant one, like this month when I only had to pay $57.
But last August my bill was $127.
Variable expenses are your regular expenditures that fluctuate in cost from month to month.
That surprise was less welcomed.
Bills and other expenses that fluctuate from month to month can wreak havoc on anyones budget.
How do you prepare for costs that dont stay the same?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Variable expenses can be essential, like in the case of groceries, utility bills and gas.
Variable expenses differ from your fixed expenses, which stay the same over time.
Fixed costs are simple to budget for.
You know exactly how much your rent or cable bill will be each month.
Variable expenses, on the other hand, are trickier.
Did you know?
You could also use the average of three or four months, but it wont be as comprehensive.
There will be months when you spend more and months when you spend less.
Thats why its important to set money aside to account for those fluctuations.
Money experts refer to this practice as setting up a sinking fund.
During the months when you spend less than average, youll divert the extra money into your sinking fund.
But you could do your best to stick to consistent spending limits for your variable expenses whenever possible.
Use thecash envelope systemto adhere to the spending limits you set for your variable expenses.
For example, you might stick $100 in an envelope for dining out.
This approach only works if you have enough wiggle room in your budget.
But it’s possible for you to take a stab at anticipate expenses in advance.
Dont let yourself be surprised by what you could have planned for.
Is there a movie coming out that youve been dying to see?
Add the cost of movie tickets, popcorn and drinks to your entertainment budget.
Is a friends birthday coming up?
Budget some money to go out and celebrate.
Use coupons when shopping and check rebate sites after youve made your purchases.
Adjust the temperature on your thermostat and water heater to reduce your utility costs.
Make your owncleaning supplies.
Organize apotluck dinnerduring the next holiday, instead of cooking (and buying) everything yourself.
The saving possibilities are wide.
Nicole Dow is a senior writer at The Penny Hoarder.
Buying generic brands is one thing she does to lower the cost of her variable expenses.
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
