Quick Answer: What Are Optional Expenses?

Is a phone bill a fixed expense?

Fixed expenses are consistent and expected bills you pay each month, such as a mortgage or rent, a cellphone bill and a student loan payment.

Car insurance, home insurance and life insurance are also fixed payments, along with your monthly electric and water bills..

Is Internet a fixed expense?

Some examples of fixed costs include: Rent. Telephone and internet costs.

What are 2 types of expenses?

Different Types of Expenses There are two main categories of business expenses in accounting: Operating expenses: Expenses related to the company’s main activities, such as the cost of goods sold, administrative fees, and rent. Non-operating expenses: Expenses not directly related to the business’ core operations.

How do you classify expenses?

Types of Expenses The most common way to categorize them is into operating vs. non-operating and fixed vs. variable. One of the most popular methods is classification according to fixed costs and variable costs.

What are examples of monthly expenses?

You likely have a slew of monthly expenses: Mortgage or rent….NeedsMortgage/rent.Homeowners or renters insurance.Property tax (if not already included in the mortgage payment)Auto insurance.Health insurance.Out-of-pocket medical costs.Life insurance.Electricity and natural gas.More items…

What is an example of a discretionary expense?

Discretionary expenses are often defined as nonessential spending or, in other words, wants rather than needs. This means a business or household is still able to run even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.

Is groceries a fixed expense?

Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense. … Variable expenses may be harder to cut back on than fixed expenses because they can affect your lifestyle.

What are necessary expenses?

An individual’s ordinary and necessary living expenses include rent, mortgage payments, utilities, maintenance, food, clothing, insurance (life, health and accident), taxes, installment payments, medical expenses, support expenses when the individual is legally responsible, and other miscellaneous expenses which the …

What are examples of expenses?

Examples of ExpensesCost of goods sold.Sales commissions expense.Delivery expense.Rent expense.Salaries expense.Advertising expense.

What are the categories of expenses?

There are three major types of financial expenses: Fixed, Variable, and Periodic. Fixed expenses are expenses that don’t change for long periods of time, like office rent or vehicle lease payments for you or your staff. Variable expenses change from month to month, such as utilities or meals and entertainment.

What are monthly expenses?

Create a list of monthly expenses. While this includes your recurring living expenses, such as your rent or mortgage, car payment, and utilities, it also includes the more variable amounts you spend on haircuts, groceries, and clothes each month. Examine your expenses.

What expense is rent?

Rent expense is the cost incurred by a business to utilize a property or location for an office, retail space, factory, or storage space. Rent expense is a type of fixed operating cost or an absorption cost for a business, as opposed to a variable expense.

What accounts are expenses?

Some common expense accounts are: Cost of sales, utilities expense, discount allowed, cleaning expense, depreciation expense, delivery expense, income tax expense, insurance expense, interest expense, advertising expense, promotion expense, repairs expense, maintenance expense, rent expense, salaries and wages expense, …

Is Rent a flexible expense?

What are Flexible Expenses? Fixed expenses and flexible expenses should be part of every budget. Yet some people only include their fixed expenses — rent or mortgage payment, car payment and cable TV bill, in other words, costs that typically remain the same from month-to-month — when preparing a budget.

What is a flexible cost?

Flexible costs, also called discretionary costs, are costs that are not committed to by the company. For some costs, such as rent or loan payments, a business is contractually obligated to make periodic payments and will continue to incur costs until some point in the future.

What are the 3 types of expenses?

Fixed expenses, savings expenses, and variable costs are the three categories that make up your budget, and are vitally important when learning to manage your money properly. When you’ve committed to living on a budget, you must know how to put your plan into action.

What are the 4 types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far). What are these different types of expenses and why do they matter?

What do you call unnecessary expenses?

dispensable, expendable, inessential, needless, nonessential, redundant, supererogatory, superfluous, surplus to requirements, uncalled-for, unneeded, unrequired, useless.

What is an example of a fixed expense?

Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.

What are 5 flexible expenses?

Flexible expense examples include groceries, dining out, entertainment, and even utilities….Here are some examples of variable essential costs:Groceries.Cell Phone Plans.Internet Services.Transportation Costs (gas, level of insurance coverage, etc.)Utilities.

What are three types of flexible expenses?

There are three major types of expenses we all pay: fixed, variable, and periodic.