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Publication #FCS7170

Building a Spending Plan: Step 4 - How Much Are Your Fixed and Flexible Expenses?1

Nayda I. Torres, Josephine Turner, and Brenda C. Williams2

This step helps you record all of your expenditures each month. There are two major types of expenses in a spending plan. They are “fixed expenses” and “flexible or controllable expenses.”

Fixed expenses are those you usually pay on a regular basis. They may be the same amount each time, or they may vary from month to month. Here are some common fixed expenses:

  • Child care

  • Rent or mortgage

  • Household bills (water, electricity, phone)

  • Installment plans (car, loans)

  • Insurance premiums

  • Deposits to savings account

Many fixed expenses are paid every month, but others have to be paid every three months (quarterly), every six months (semiannually), or every year (annually).

Flexible expenses are those that usually vary in amount from month to month. Since you are not committed to previous agreements with others for these amounts, you have more control over these expenses than for fixed expenses. When you are squeezed financially, you can cut back on flexible expenses or even cut some out. Flexible expenses can include the following:

  • Food (groceries, eating out)

  • Clothing (new clothes, clothing repairs, dry cleaning)

  • Transportation (gasoline, car repair, public transportation)

  • Medical care (doctor bills, medicine)

  • Education and recreation (books, magazines, movies, entertainment, vacations)

  • Personal care (haircuts, manicures)

  • Gifts and donations (birthdays, holidays, charity)

Figure 1. 
[Click thumbnail to enlarge.]

Flexible expenses usually vary from month to month. People who keep spending records for the first time are often surprised by how much they spend on things they don’t really need or want.

As you gain better control over your flexible expenses, you will have an easier time covering your fixed expenses, avoiding late penalties, and achieving your financial goals.

There are four tables that are provided to assist you in calculating your total expenses. Follow the directions below for each of the tables.

Table 1 is designed for you to list all of your monthly fixed expenses. If some of your expenses are paid other than monthly (such as a quarterly car insurance payment or a semiannual homeowner's insurance premium), use Table 3 to convert the payments into monthly payment amounts. Do not total the categories until you have completed Table 3.

Table 2 is designed for you to list all of your monthly flexible expenses. You may total these categories when you have listed all of this type of expense.

Table 3 is to be completed to make your record of expenses more complete. Think about the types of expenses listed and how often you make payments. If you make these payments monthly, then list that amount under the proper category in Table 2. If you make a quarterly payment (four times a year), list that amount under the "amount paid quarterly" column. If you make only two payments a year, list that under the "amount paid semiannually" column. Do this for all the payments that are made other than monthly. The calculation chart following Table 3 gives directions for converting these kinds of payments into monthly dollar amounts (to be listed in the "calculated monthly" column). List these same monthly amounts under the proper categories in Table 1. Then you can add all of the categories in Table 1.

Table 4 is a final chart to list and add categories so that you get a grand total of all your expenses. This total will be used in Step 5 (http://edis.ifas.ufl.edu/he825).

Remember, these tables are only meant to help you make your first spending plan. You may add and delete categories to make the tables fit your exact expenditures.

Use Tables 1 and 2 to record and total your fixed and flexible expenses. These expenses are calculated by the month. These amounts can be determined by using your receipts, bank statements, check register, and other records.

Table 1. 

Monthly Fixed Expenses

Expenses

$ per month

Expenses

$ per month

Housing

 

Insurance1

 

Rent/Mortgage

 

Health

 

Cable TV

 

Life

 

Water

 

Automobile

 

Electricity

 

Home

 

Fuel

 

Other

 

Phone

 

Subtotal

$

Other

     

Subtotal

$

Savings

 
   

Payroll Deduction

 

Installment Debts

 

Christmas Club

 

Furniture/Appliances

 

Set Asides

 

Car

 

Other

 

Loans

 

Subtotal

$

Other

     

Subtotal

$

Other

 
   

Tithes

 

Child Care

 

Other

 

Babysitter

 

Subtotal

$

Nursery/Day Care

     

Other

     

Subtotal

$

   

1If these are not paid monthly, see Table 3 for instructions on how to calculate the monthly amount.

Table 2. 

Monthly Flexible Expenses

Expenses

$ per month

Expenses

$ per month

Food & Other Items

 

Medical Care

 

Groceries

 

Doctor's Bills

 

Restaurants

 

Prescriptions

 

Cigarettes

 

Therapy

 

Pet Food

 

Other

 

Cleaning/Other Supplies

 

Subtotal

$

Other

     

Subtotal

$

Education/Recreation

 
   

Books/Magazines

 

Clothing/Personal Care

 

Movies/Music

 

Purchases

 

School Supplies

 

Repairs/Alterations

 

Vacations

 

Dry Cleaning

 

Other

 

Accessories

 

Subtotal

$

Hairdresser/Barber

     

Other

 

Gifts & Donations

 

Subtotal

$

Birthdays

 
   

Holidays

 

Transportation

 

Charities

 

Public Transportation

 

Other

 

Maintenance (Tune-ups)

 

Subtotal

$

Operation (Gas, Oil)

     

Other (Tags & Licenses)

     

Subtotal

$

   

In order to make your record of expenses more complete, you need to list those payments that you may not make every month. An example would be auto insurance that you pay quarterly (four times a year) or homeowner’s insurance you pay semiannually (twice a year). Think about these types of fixed expenses and fill in the chart provided in Table 3.

Table 3. 

Additional Fixed Expenses

Category

Frequency of Payment

Calculated Monthly Expenses (see note below)

Amount Paid Quarterly

Amount Paid Semiannually

Amount Paid Annually

Insurance

       

Auto

       

Life

       

Home

       

Health

       

Disability

       

Other

       

Taxes

       

Licenses

       

Regular savings

       

Short-term goals

       

Long-term goals

       

Other

       

Note: To get a monthly amount for the expenses listed in Table 3 above, use the following calculations:

  • If the payment is made quarterly (four times a year), divide the amount by 3.

  • If the payment is made semiannually (twice a year), divide the amount by 6.

  • If the payment is made annually (once a year), divide the amount by 12.

List these amounts in the last column of Table 3 above and also in Table 1.

Table 4 provides a chart for you to total your fixed and flexible expenses for a monthly grand total of expenses. This is the amount of money you will need each month to cover all your expenses.

Table 4. 

Grand Total of Monthly Fixed and Flexible Expenses

Expenses

$ per month

Fixed Expenses

 

Housing

 

Installment Debts

 

Child Care

 

Insurance

 

Savings

 

Other

 

Calculated Additional Monthly Expenses from Table 3

 

Total Fixed Expenses

$

   

Flexible Expenses

 

Food & Related Items

 

Clothing & Personal Care

 

Transportation

 

Medical Care

 

Education/Recreation

 

Gifts & Donations

 

Other

 

Calculated Additional Monthly Expenses from Table 3

 

Total Flexible Expenses

$

   

Grand Total of Expenses

(add totals of two boxes above)

$

By completing all these charts in Step 4, you should have a complete determination of your total expenses per month.

For the rest of the steps in the Building a Spending Plan series, visit http://edis.ifas.ufl.edu/topic_series_building_a_spending_plan.

Footnotes

1.

This document is FCS7170, one of a series of the Department of Family, Youth and Community Sciences, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. First published: February 1997. Revised: July 2012. Please visit the EDIS website at http://edis.ifas.ufl.edu.

2.

Nayda I. Torres, Professor Emeritus, Department of Family, Youth and Community Sciences; Josephine Turner, Professor Emeritus, Department of Family, Youth and Community Sciences; and Brenda C. Williams, Extension Agent IV, Alachua County Extension Office; Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL 32611.


The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other UF/IFAS Extension publications, contact your county's UF/IFAS Extension office.

U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS, Florida A & M University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.