Types of Expenses
As we think about we manage our money choices, it is important to have enough money to cover the different types of expenses that we have at the time the money is needed.
With the cash flow statement, we can look at the amount of our income, where we spend our money and the amount of money we spend. We have different kinds of expenses. We have daily expenses. We may have weekly expenses. We have monthly expenses. We have emergency expenses. We have major expenses and future goals that require money. We have seasonal expenses. We have miscellaneous expenses.
Daily expenses are those expenses we spend money for in a day such as meals away from home, coffee, snacks, nicotine, meals, Uber/Lyft or bus money.
Weekly expenses might be money needed for gas for the car, laundry, personal hygiene, or groceries. There is a Spending Tracker Worksheet at the end of this lesson that you can use to track your daily expenses and weekly expenses.
Monthly expenses are those bills we pay once a month. Monthly expenses include rent or mortgage, utility payments, phone bill, health insurance payments, debts or past-due bills.
Emergency expenses include tires, medical expenses, unemployment, car repairs, dental bills, house repairs, appliance replacement or repairs.
Major expenses and future goals include purchases such as buying a different car, buying a house, adding rooms to your home, braces for teeth, paying for education (yours or your children’s), buying a boat or furniture.
Seasonal expenses are those expenses for which we need money on an irregular basis. Seasonal expenses include school supplies and clothes, house or renter’s insurance, and car insurance. There is a Seasonal Expense Tracker at the end of this lesson that you can use to track your seasonal expenses.
Miscellaneous expenses include civic club dues, games, newspaper or magazine subscriptions, clothes, movies, recreation, and personal care.
Track Your Spending
The spending tracker worksheet can help us look at where our money goes and determine the frequency with which we spend on different purchases. This provides the information we can use to create a spending plan so we have available as we need it.
As you track your expenses, observe where you are spending your money. Are you spending money on things you need or spending impulsively or automatically on things that compete with what you really need?