As such, discretionary expenses rarely have anything to do with a business or household's day-to-day operations and, instead, have to do with lifestyle and choice. These are generally considered wants, while non-discretionary expenses are usually referred to as needs. While the basic flexible budget is prepared, indicating how the expenses. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary. The types decide the flexible budget format applicable in different scenarios. Many corporation expenses as well as individual expenses are actually flexible in nature, in that there are ways to manipulate the amount of the expense and still remain within a balanced budget. Variable expenses, on the other hand, are costs that may vary or be unpredictable, such as a car. Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis. Discretionary expenses vary depending on the business or person.Įxpenses are divided into several categories, namely non-discretionary and discretionary. Fixed expenses are costs that largely remain constant, such as your monthly rent or mortgage.Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties.In a corporate environment, discretionary expenses are usually costs linked with improving a company’s reputation among its customers and employees.Managing your personal finances can be confusing. By planning ahead for both types of expenses, you will be able to stay on top of your budgeting goals and avoid any unexpected costs down the line. Flexible expenses (often called variable expenses in accounting) are those that fluctuate month over month, like groceries, dining out, or entertainment. A discretionary expense is a cost that is not essential for the operation of a home or a business. Flexible expenses are those that vary from month to month while periodic expenses are those that occur regularly but not necessarily every month. Lets take a look at some examples of fixed and variable expenses and how you can account for them in your budget. Fixed expenses are those that typically stay the same month over month your rent or mortgage, car payments, streaming services, and so on.
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