This should not be confused with budget contingency that includes amounts for costs that are difficult to plan or predict. There are 2 types of flexible spending accounts: A health care FSA (HCFSA) can cover medical, prescriptions, hearing, dental or vision expenses that you would otherwise pay for out. A flexible budget is a budget that changes according to business or activity volumes. Health care flexible spending account (FSA). Entertainment costs can usually be broken down further into categories such as a cable television subscription, music downloads, dinners at restaurants, and vacations. Learn more about the 3 different types of FSAs and what types of eligible expenses they cover. Cutting costs by adjusting flexible expenses is easier than cutting fixed expenses, as fixed expenses remain constant. Flexible expenses are controllable costs that vary from week to week or month to month. When financial advisors counsel individuals, they routinely ask them to estimate their expenses, separating those that are necessary and non-negotiable, like mortgage and car payments, and those that are flexible, like entertainment costs. Key Takeaways There are two major types of expenses: fixed and flexible. To note your flexible expenses, review your credit card and checking account statements every month to see what non-essential items you are spending money on. How Budgets Work Although the budgeting process for companies can become complex, at its most basic, a budget compares a companys revenue with its expenses in a given period.To create a budget and stick to it, it is critical that both fixed and flexible expenses are included.
Even inflexible expenses can contain flexible components, such as choosing more affordable substitutes.These are non-essential expenses that stand. Flexible expenses stand in contrast to fixed expenses, also known as inflexible expenses. A flexible expense is a discretionary purchase that can be altered or eliminated without a significant downside.In personal budgeting, a flexible expense is a non-essential expense that can be cut back or eliminated.
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