Grade 6 Lesson 2: #Types of #Expenses

Expenses refer to the money you need to pay for stuff that you buy and use.

There are 4 types of expenses:

Fixed Expenses:
Fixed expenses are the kind of expenses most people think of when they’re drafting a budget. They are standard expenses that happen every month, on a certain day, and for a certain amount. Your mortgage, cell phone bill, car payment, gym membership, utilities, and Netflix are all fixed expenses. Think of fixed expenses like your bills. Weekly expenses like a daycare payment, dog walking services, or house cleaners, while not a monthly bill, are fixed expenses too.

Recurring Expenses:
We sometimes refer to recurring expenses as day-to-day expenses. They are the types of expenses or purchases that happen throughout the month. They are not as predictable as fixed expenses in terms of their dates or amounts, but they reliably happen. Some recurring expenses you probably have are groceries, gasoline, eating out, and Target runs

Non-Recurring Expenses:
Non-recurring expenses are the ones that trip people up all the time when they decide to get on a budget. These expenses may only happen once or a couple of times a year. But when they hit, they might hit big. Common examples of non-recurring expenses include a water bill, car registration fees, or your Amazon Prime membership. Other examples of such expenses include clothes, shoes, and other apparel

Unplanned Expenses:
These are the most frustrating kind of expenses, and are for the most part unpredictable. You don’t know when they hit or what they’ll cost you, but you will most definitely feel it when they do. Think of some worst-case scenarios: Your car gets totaled. Your roof starts leaking, and you find out you need to reshingle the whole thing. These are emergency type expenses, and can cause the most disturbance when you are trying to live on a budget

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