Variable expense plans are usually suitable for people who lack the time or ability to keep track of expenses and income, especially when they go on vacation or do other things. These types of plans allow the person to decide how much should be budgeted for their lifestyle and then designate a percentage of their monthly income toward each expense. These items are not considered necessities, but they can fluctuate in cost from month to month. Examples of variable expenses include car insurance, rent or mortgage payments, and groceries.
Luckily for you, we’re here to help. We’ve put together a budget for variable expense as well as tips on how much people typically spend each year in these categories.
The following page will explain more about variable expenses, (https://www.youneedabudget.com/what-is-a-variable-expense)
The downside is that this type of plan can become expensive if one becomes too lax in monitoring spending, so it’s important to make sure your setup works well.
It’s important to make sure you list your expenses, and then estimate how much of a part of your monthly income should be set aside for each. It’s also a good idea to check that the percentages you’ve chosen are realistic if you have a total budget of $3000 for food and entertainment, it’s not likely that you can allocate 50% per month. You might want to consider raising the amount or lowering the percentages.
Once these items are set up, they become recurring entries on your Excel spreadsheet. Finally, you need to enter your income into the spreadsheet, and then every time you receive a deposit notice from your bank, you need to write it down on your spreadsheet as well. If you want to really increase your accuracy, try getting the bank’s website to provide the information automatically.
Once a month, enter your new income into the first blank spot on the spreadsheet and all of your recurring entries will be adjusted accordingly. This way, all of the information is in one place for easy access.
Using the full version of Excel and a “what-if” function, you can easily simulate what will happen if your spending increases or decreases. You can even track cash flow. The only drawback is that it’s easier to break or lose a physical spreadsheet than a program like Quicken.
Another option for dealing with variable expenses is to use an online account for your budgeting needs, such as Mint [1] or Yodlee MoneyCenter. These sites allow you to track your income, expenses and loan balance, then let you set up “automatic deposits” or “automatic transfers” with your checking or savings account. Their services also allow you to see a list of all of the accounts where your money is being spent online.
Example: Budget Plan for a Falling Income
Let’s say your net pay is $4000 per month, but you suddenly receive a notice that orders have decreased by 50% for one month – meaning the order amount has fallen to only $2000 per month.