How To Estimate Variable Expenses Percentages

Here are instructions for how to estimate variable expenses percentages. Variable expenses are expenses that don’t fall into any of the categories of monthly expenses, such as utilities, mortgages, and others. Rather, they include things like groceries, eating out, going to the movies, buying clothes, and other things. The types of variable expenses, as well as the amount, may change from month to month.

Variable expenses percentages are very important when determining a budget. You can estimate how much these are by following these steps:

  1. Decide how many months’ income and expenses you will use to estimate your variable expenses percentages. Three months should be the minimum amount of time, you may even want to go back for one year.

  2. Determine your total income AFTER TAXES for the time period you have chosen to use in your estimating. Write this figure down, because you will be coming back to it later.

  3. Look at any documented expense records you have, such as receipts, expense accounts that let you keep track of how much is in there and how much has been spent, credit card statements, and bank statements. Pull out only the figures for variable expenses from these.

  4. Add these figures up and record that number.

  5. Make a guess as to how much you may have spent but did not keep records for. Record that number.

  6. Add figures from three & four together.

  7. Divide the variable expense amount by your total income amount, and multiply that answer by 100. This will give you your variable expenses percentages.

Once you have that figure, you can compare it with your other expenses, and make any changes you feel you need to. You may need to cut back a little on variable expenses, or you may find out that you can devote a little more of your hard-earned money to them.

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