Budgeting doesn’t have to feel like a chore. Some expenses, like rent or subscriptions, are predictable—steady and easy to plan for. Others, like groceries or takeout, can swing depending on your week. Keeping an eye on both the steady and the unpredictable costs is what helps your finances stay in check without feeling like a juggling act.
What Are Variable Expenses?
Variable expenses change month to month based on your choices and circumstances. These fluctuating bills are harder to predict than fixed costs, but you have more control over them.
Common examples include
- Groceries and dining out (yes, coffee counts)
- Gas and transportation
- Utility bills (electricity, water, gas—basically paying to not be miserable)
- Entertainment and streaming services (all seventeen of them)
- Clothing and personal shopping (those “limited time” sales get everyone)
- Gifts and holiday spending (suddenly everyone you went to high school with is getting married)
- Medical and pharmacy costs (adulting tax)
- Home maintenance and repairs (when your sink decides to become a fountain)
What Are Fixed Expenses?
Fixed expenses stay identical from month to month. These nondiscretionary costs form the foundation of your budget. You can’t skip them, and they rarely change without you making a phone call.
Common examples include
- Mortgage or rent payments (the price of having walls and a roof)
- Insurance premiums (health, auto, home, life—paying for peace of mind)
- Car payments and loan installments (your vehicle’s monthly subscription fee)
- Debt repayment (student loans, credit cards—the ghosts of decisions past)
- Property taxes (the joy of homeownership, apparently)
- Internet and phone plans (non-negotiable in the modern world)
- Gym memberships and subscription boxes (those “free trials” that haunt you)
- Childcare or tuition payments (investing in tiny humans or future you)
Budgeting for Fixed and Variable Expenses
Calculate Your Baseline
Start by listing every fixed expense with its exact amount. Add them up. That number is your baseline—the stuff you absolutely have to cover before you even think about buying that fancy cheese. Everything else is variable and gets handled separately, like the guest list at a party where you secretly hope some people don’t show up.
Average Out Your Variable Costs
For your variable costs, pull up your financial statements from the past six to twelve months. Calculate the average monthly cost for each category. Use that average as your monthly target so you’re not caught off guard when the AC bill doubles in August and you suddenly understand why your parents were always yelling about closing the door.
Build in a Cushion
Budget conservatively. Overestimate your fluctuating bills and underestimate your income. Build a line item cushion into categories that swing around a lot. If you don’t end up spending it, just roll it into savings or treat yourself without the guilt. Think of it as a financial shock absorber for those months when everything seems to break at once.
If your income isn’t steady, here’s a helpful guide on budgeting with irregular income to keep things under control.
Consider the 50/30/20 Rule
Lots of people swear by the 50/30/20 rule. Put 50% of your income toward needs—those fixed non-discretionary costs plus essentials like groceries. Reserve 30% for wants and fun stuff. Stash 20% in your emergency fund or throw it at extra debt repayment. It’s like giving every dollar a job before it wanders off and gets into trouble.
How to Lower Fixed and Variable Expenses
Lowering Fixed Expenses
Fixed costs can feel locked in, but there’s usually some wiggle room if you’re willing to ask and mention switching providers (this works surprisingly well with internet providers).
- Shop around for better insurance premiums every year—loyalty is cute but expensive
- Bundle your auto and home policies for discounts like a financial combo meal
- Call your internet provider and ask for a loyalty discount (seriously, this works)
- Refinance your mortgage or debt repayment if interest rates have dropped
- Negotiate your rent at lease renewal or look for roommate options (living alone is overrated anyway)
- Cancel gym memberships you haven’t touched since that January motivation spike
- Switch to a cheaper phone plan or jump on a family shared plan (time to reconnect with your cousin)
- Question your property tax assessment if it seems way off (asking “are we sure?” is free).
Lowering Variable Expenses
Variable expenses are where you can score some quick wins without changing your entire lifestyle:
- Track your spending for thirty days to see where money actually goes (spoiler: it’s mostly food)
- Cut forgotten subscriptions and free trials you forgot you signed up for during a 3 AM shopping spiral
- Meal prep on Sundays so you’re not grabbing $15 lunches all week because you “forgot” to pack something
- Set a cash limit for discretionary spending on weekends
- Use programmable thermostats to cut utility bills without having to think about it
- Buy generic brands for groceries—your wallet won’t notice, even if your ego does
- Carpool or use public transit to reduce gas costs and get some quality podcast time
- Wait 48 hours before making non-essential purchases (impulse buys hate this trick, but your savings account loves it)
Putting It All Together
Budgeting works best when you treat it as an ongoing practice rather than a one-time setup. Fixed expenses provide your financial foundation, while variable expenses require regular monitoring to keep them in check. The key is building in a cushion for fluctuations and reviewing your progress consistently so your money supports your priorities. For practical strategies on maintaining your budget long-term, see How to Stick to a Budget. With steady attention and a clear plan, you can handle unexpected costs, enjoy your spending, and stay on track toward your financial goals.