What are flexible expenses? (with photos)

Grocery shopping is an example of flexible spending.

Flexible expenses are costs that are not considered fixed or set, but can be reduced or increased as needed. Many corporate expenses, as well as individual expenses, are actually flexible in nature as there are ways to manipulate the amount of expenses and still stay within a balanced budget. Understanding what does and does not constitute a fixed cost or expense can have a significant impact on how well an individual or company manages revenue and stays within their monthly budget.

An inflexible household budget can lead to a lot of stress if an unexpected cost arises.

It is important to note that flexible spending may or may not be needs related. For example, food is considered an essential expense in the family budget. It is possible, however, to adjust the amount of resources that are destined for food consumption for the weekly or monthly budget. All it takes to manage or control the cost of food is careful planning when it comes to grocery shopping, as well as eliminating the number of times during the period meals are eaten at a restaurant or ordered as take-out items. . This same approach can be applied to flexible spending of any kind, even appliance selection, automobile selection, or furniture selection.

Flexible budgets are essential to ensure unexpected expenses can be covered.

Various articles of clothing are examples of flexible spending. The consumer has the option to buy clothes that are available at a discount or buy similar items that are sold at full price. Assuming that both garments are of similar quality, the consumer must make a decision to buy one or the other garment, or even give up on the purchase altogether. At each point in the process, control is in the hands of the consumer, who decides how and when to proceed with the transaction, controlling the amount of money spent to acquire a desirable or necessary item.

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This is in contrast to fixed expenses, where there is no control over the amount of the expense. An example of a fixed household expense is a monthly mortgage or rent payment. It’s important to pay the same amount each month to catch up on debt. There is no option to reduce or otherwise change the amount for that month when and as desired, as the terms of the agreement governing the transaction do not allow for this type of activity.

Some debt involves a combination of fixed and flexible expenses. This is true for many credit card accounts. The debtor is expected to pay a minimum amount each month, this amount being determined by the creditor, not the debtor. The debtor may choose to set aside funds to pay an amount above and beyond the required minimum payment. Should any unforeseen circumstances occur, the debtor can still keep the credit card account current by making the minimum payment due, while diverting the additional sum set aside to help manage the emergency.

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